14/12/2016

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:00:00. > :00:07.This is Business Live from BBC News with Ben Thompson and Sally Bundock.

:00:08. > :00:12.America's Central Bank prepares to raise the cost of borrowing

:00:13. > :00:16.We'll assess what a hike would mean for America

:00:17. > :00:44.Live from London, that's our top story on Wednesday, 14th December.

:00:45. > :00:49.Markets have factored in the rate rise already -

:00:50. > :00:53.We'll assess the impact on economies around the globe.

:00:54. > :00:57.Our Asia business hub will update us on what could be a lucrative

:00:58. > :01:07.Markets in Europe are headed down slightly today, but traders across

:01:08. > :01:10.Europe's key financial centres will be looking to Wall Street.

:01:11. > :01:13.Bringing fast internet to the masses.

:01:14. > :01:18.That's the promise of 5G connectivity but with many areas

:01:19. > :01:20.struggling to get just a slow, basic service,

:01:21. > :01:24.We'll get the inside track from the man charged with speeding

:01:25. > :01:31.And small businesses say they're "very confident" about next year.

:01:32. > :01:33.So we want know - are you expecting next year to be

:01:34. > :01:54.The world's most powerful central bank today makes a decision that

:01:55. > :01:57.could have reverberations around the globe.

:01:58. > :02:00.The US Federal Reserve is widely expected to announce that it's

:02:01. > :02:07.raising interest rates for only the second time in ten years.

:02:08. > :02:09.It comes amidst signs the US economy is strengthening.

:02:10. > :02:12.The move would make the cost of borrowing more

:02:13. > :02:15.expensive for Americans, but will also have an impact

:02:16. > :02:16.elsewhere especially in developing economies.

:02:17. > :02:22.Our correspondents around the world explain.

:02:23. > :02:26.Here in Singapore and around South East Asia, expectations have been

:02:27. > :02:31.rising that the US will hike interest rates. That's led to money

:02:32. > :02:36.flowing out of Asia and into the US dollar which has resulted in sharp

:02:37. > :02:40.declines in Asian currencies. One of the worst affected is Malaysia. It

:02:41. > :02:45.has seen its currency fall to record lows in recent weeks and this is

:02:46. > :02:49.coming at a time when many Asian companies have to start paying back

:02:50. > :02:53.their debts. Much of that is in US dollars and it will be far more

:02:54. > :03:02.expensive to do that now than it has been in the past.

:03:03. > :03:10.In Brazil, Brazilians feel any move by the US Fed. Also Brazil relies

:03:11. > :03:13.heavily on commodities sold in US dollars so the country and its

:03:14. > :03:20.companies are generating less revenue in real terms. That means a

:03:21. > :03:25.slower growth and a weaker economy. In India the stock markets have been

:03:26. > :03:29.volatile ahead of the Fed's meeting. A rate hike in the US could lead to

:03:30. > :03:33.a cash flight here in India with foreign investors selling off their

:03:34. > :03:38.stocks and equities and that could weaken the Indian rupee as well, but

:03:39. > :03:40.compared to other emerging markets, the impact is expected to be

:03:41. > :03:56.limited. Mike Bell is global

:03:57. > :03:58.market strategist at JP Morgan Asset Management joins us

:03:59. > :04:06.in the studio. Mike, why a US rate rise now? The US

:04:07. > :04:11.economy is heating up. Consumers are feeling better about the outlook and

:04:12. > :04:14.the number of homes being built is increasing. The US is in a place

:04:15. > :04:18.where it can with stand a higher rate of interest. Is it too late?

:04:19. > :04:21.They should have put rates up earlier, but I think they waited and

:04:22. > :04:26.now they're going to go, I think. What is the danger that if they

:04:27. > :04:28.don't do it today, what happens to the economy? You talked about the

:04:29. > :04:31.picture looking good. Unemployment is coming do you think and price

:04:32. > :04:35.stability on track, what does it mean if they don't do it now, there

:04:36. > :04:39.is a danger the economy overheats? Precisely. The unemployment rate is

:04:40. > :04:44.so low that you would expect wages to start picking up. And if they

:04:45. > :04:48.don't put interest rates up now and in the coming months over next year,

:04:49. > :04:51.then it could lead to an overheating of the economy which means they

:04:52. > :04:55.would have to put interest rates up faster later which would be

:04:56. > :04:58.negative. What about about maybe said following the announcement of

:04:59. > :05:02.the rate increase, assuming that does happen. Everyone wants to know

:05:03. > :05:05.what the steer is going to be? It is unlikely that they will give that

:05:06. > :05:08.much away. They have been saying for sometime now that they will put

:05:09. > :05:13.interest rates up twice next year. That's in line with our forecast.

:05:14. > :05:16.Until recently, the market didn't believe them, but you have seen

:05:17. > :05:20.since the election the markets moving to price in two rate rises

:05:21. > :05:24.next year. On the issue of the election, are we expecting the Fed

:05:25. > :05:28.to give us any indication about what they might happen as a result of a

:05:29. > :05:32.Trump presidency. It maybe not so clear, but could they talk about the

:05:33. > :05:35.economic impact or what may happen as a result of the Trump presidency?

:05:36. > :05:39.In a word, no. I think they're unlikely to comment on that. They

:05:40. > :05:44.will probably talk about the fact that even beside that, the economy

:05:45. > :05:48.is heating up. You're seeing that prior to any fiscal stimulus from

:05:49. > :05:52.the Trump administration, but they will want to see what actually gets

:05:53. > :05:57.passed rather than speculate about what he might do. What is your view

:05:58. > :06:00.on what the Trump boost maybe like. Some are saying there will be a

:06:01. > :06:04.short-term boost, but although unemployment is very low, wages are

:06:05. > :06:08.also remaining very low. People haven't really got that extra bit of

:06:09. > :06:13.money to spend therefore, the economy won't be boosted much? We

:06:14. > :06:20.expect wage growth to pick up and the tax cuts to be helpful for the

:06:21. > :06:25.economy and they could add 0.5% to US GDP next year and the year after

:06:26. > :06:34.that, but helpful, but not an enormous stimulus. Mike Bell, thank

:06:35. > :06:37.you. Michelle and Samira will be across

:06:38. > :06:41.that later on in the United States where they are based.

:06:42. > :06:44.It is a big day at scandal-hit Mitsubishi Motors.

:06:45. > :06:47.Shareholders are expected to approve Carlos Ghosn as chairman

:06:48. > :06:51.He currently runs rivals Nissan and Renault.

:06:52. > :06:55.They will also vote on whether to triple

:06:56. > :06:56.the annual pay packages of Mitsubishi Motors'

:06:57. > :07:03.Mr Ghosn is taking over the reins of Mitsubishi after Nissan

:07:04. > :07:05.bought a controlling stake earlier this year.

:07:06. > :07:07.The US bank Wells Fargo has been hit with restrictions

:07:08. > :07:10.after failing to fix its bankruptcy contingency plan.

:07:11. > :07:13.Banks labelled "too big to fail" must have a so-called "living will"

:07:14. > :07:17.that would allow them to close down without the help of public money.

:07:18. > :07:19.Wells Fargo will be barred from opening international branches

:07:20. > :07:30.and buying non-bank companies until it satisfies the regulators.

:07:31. > :07:37.Let's take you to the Business Live page. It makes a change that we're

:07:38. > :07:40.talking about a firm taking on staff! You will know we're talking

:07:41. > :07:46.about tech firms particularly laying off staff, but there is a story here

:07:47. > :07:51.that, ahead of Trump meeting IBM promises a hiring spree. It says it

:07:52. > :07:56.will hire 25,000 staff in the United States over the next four years.

:07:57. > :08:01.Quite a few big names in technology are expected to be headed to Trump

:08:02. > :08:05.Tower to meet the president including the likes of Tim Cook, the

:08:06. > :08:09.head of Apple and other big tech chiefs. It will be interesting to

:08:10. > :08:16.see how that set of meetings goes. The golden elevator moment! Trump

:08:17. > :08:19.has fired warning shots at tech firms recently about where they make

:08:20. > :08:21.things and their tax arrangements. It would be nice to be a fly on the

:08:22. > :08:24.wall there, I think! Shares in some of the world's

:08:25. > :08:27.biggest gambling firms have rallied after the legalisation of casinos

:08:28. > :08:36.in Japan moved a step closer. Tim, this is an important move

:08:37. > :08:41.because a lot of people there like gambling, it is fair to say? Yes,

:08:42. > :08:44.well, I mean, Japan has been traditionally reluctant to go down

:08:45. > :08:48.this path and opponents in Japan have more or less the same worries

:08:49. > :08:52.as opponents everywhere, that's gambling addiction and one party in

:08:53. > :08:57.the Prime Minister's ruling coalition has expressed doubts. So

:08:58. > :09:02.it is fair to say the Bill is controversial, but casino gambling

:09:03. > :09:05.is looking likely. Backers hope it will attract billion in new

:09:06. > :09:10.investment and Japan is already a gambling nation, of course, but not

:09:11. > :09:15.in casinos, people bet on horse races and it has its home-grown

:09:16. > :09:19.gaming machines which are popular. Maybe that's why Japan is seen as a

:09:20. > :09:27.huge untapped market for casino operators. It could be a $40 billion

:09:28. > :09:34.industry. Foreign casino operators will be keeping a close eye on it.

:09:35. > :09:37.The news wasn't positive for gambling linked companies which

:09:38. > :09:41.rallied earlier in the day, but closed lower.

:09:42. > :09:45.A quick look at how markets are faring.

:09:46. > :09:53.We are off a little. Yesterday, the markets in Europe closed, some of

:09:54. > :09:56.them up over a 1% higher. So a little bit of profit taking perhaps

:09:57. > :10:01.going on in Europe. I don't know if we can show you Asia as well, but

:10:02. > :10:05.Japan up slightly at the close. Hong Kong was down. Again, some profit

:10:06. > :10:09.taking going on in Asian markets. We haven't got the figures for you

:10:10. > :10:19.there. That's Europe again, clearly. But just to say that in Japan, we

:10:20. > :10:20.had a survey out and news from the Bank of Japan.

:10:21. > :10:22.Joining us is Mike Amey, managing director and

:10:23. > :10:36.Let's pick up on the Fed. We've touched on it at rt start of the

:10:37. > :10:40.programme. A big day? Yes, it is a big day. The last time they raised

:10:41. > :10:44.rates was December last year. They will be pleased to get this one

:10:45. > :10:46.through and hopefully get a relatively calm market reaction.

:10:47. > :10:50.They are trying to make it as clear They are trying to make it as clear

:10:51. > :10:55.as you can do that they are going to do it and you hope that the event

:10:56. > :10:59.doesn't create volatility. They want to tell everyone that it is going to

:11:00. > :11:02.happen, so when it does happen, you get a tame market response, but we

:11:03. > :11:05.never know and it is a big day. So we will wait and see. Are you with

:11:06. > :11:09.the other Mike in the programme who says another two rate hikes next

:11:10. > :11:15.year? That's a reasonable expectation. We probably say two to

:11:16. > :11:20.three and the Fed has indicated two. So we would say that there is a risk

:11:21. > :11:24.that they will do more than that. What crucially we don't think is

:11:25. > :11:31.going to happen is a very sharp rise in interest rates simply because of

:11:32. > :11:39.fiscal policy and a big pump from Donald Trump. Explain what the Bank

:11:40. > :11:48.of Japan announced. Because they are in the opposite? The dark art of

:11:49. > :11:51.banking in Japan. They focussed not just on short-term interest rates,

:11:52. > :11:56.but longer term interest rates as well. So they've capped out ten year

:11:57. > :12:00.interest rates at 1% and then if you go out further, longer rates have

:12:01. > :12:04.been going up and they have been trying to temper that down, they are

:12:05. > :12:07.trying to manipulate not just short-term interest rates, but every

:12:08. > :12:12.interest rate that they can. A snapshot of what the UK is doing. We

:12:13. > :12:17.had inflation data yesterday and unemployment data today? The

:12:18. > :12:21.inflation tells us tell us that we had low inflation. We think it will

:12:22. > :12:25.go up next year, probably the high twos because of the effect of

:12:26. > :12:30.sterling, it will take time for imported goods to go up in price.

:12:31. > :12:34.The labour data has been good. Employment levels are high, but we

:12:35. > :12:36.have the problem of wages. People have got a lot of jobs, but they are

:12:37. > :12:39.not getting paid particularly well and that's really what we would like

:12:40. > :12:43.to see to get the economy going again.

:12:44. > :12:46.Mike, we'll return. Thank you, Mike.

:12:47. > :12:49.The need for speed 5G promises superfast internet on the move

:12:50. > :12:51.but with many countries still struggling with

:12:52. > :12:59.We ask who's winning and what needs to be done

:13:00. > :13:03.You're with Business Live from BBC News.

:13:04. > :13:06.Train bosses and unions will start formal talks this morning

:13:07. > :13:08.in an effort to resolve the Southern Rail dispute.

:13:09. > :13:16.The operator has advised its 300,000 daily passengers not to travel,

:13:17. > :13:19.after ASLEF and RMT members walked out from midnight yesterday.

:13:20. > :13:24.Southern Rail and the unions have agreed to meet at the conciliation

:13:25. > :13:26.service ACAS this morning as services are cancelled

:13:27. > :13:33.Our reporter Andy Moore is at ACAS this morning.

:13:34. > :13:38.Well, a lot of people will be pinning their hopes on the talks.

:13:39. > :13:43.They are due to get under way between the two sides in the dispute

:13:44. > :13:47.at 10am this morning. We now know there were some informal talks

:13:48. > :13:53.yesterday, but they are moving to a more formal basis today. We don't

:13:54. > :13:57.know if there are any new proposals to break the deadlock. There have

:13:58. > :14:00.been lots of talks in the past here at ACAS in the long running dispute

:14:01. > :14:04.and they never got anywhere. The dispute is over who operates the

:14:05. > :14:11.doors on the trains, whether it is the driver or the guard. As you say

:14:12. > :14:16.we are in the second day of this dispute, 2200 train services

:14:17. > :14:19.cancelled, more than a third of a million people affected and unless

:14:20. > :14:25.there is a solution here today, the strike action will go on. There is a

:14:26. > :14:31.24 hour strike that is planned for Friday. More industrial action

:14:32. > :14:34.before Christmas and a six day long strike is planned for next year

:14:35. > :14:40.unless something happens at the talks today.

:14:41. > :14:48.More detail on that, of course, I want to take you to the business

:14:49. > :14:54.pages. This net migration story is worth a

:14:55. > :14:58.read. That's an employers group calling on

:14:59. > :15:03.the Government to abandon an immigration target which was set by

:15:04. > :15:08.David Cameron. You will see HSBC closing a quarter of its branches.

:15:09. > :15:13.You will know if you looked at your local High Street of late that a

:15:14. > :15:17.number of branches have disappeared. An investigation by Which? Says the

:15:18. > :15:22.bank closed a quarter of UK branches over the last two years. It adds up

:15:23. > :15:25.to 1,000 closures altogether. If your high street is look ago little

:15:26. > :15:30.empty, it maybe because one of those branches has disappeared.

:15:31. > :15:32.Business Live, all the data you need to know as it comes in to us at the

:15:33. > :15:35.BBC. The world's most-powerful central

:15:36. > :15:40.bank today announces The US Federal Reserve is expected

:15:41. > :15:56.to hike the cost of borrowing. It would be just the second time in

:15:57. > :15:58.the last decade that it has done that. We will be right across the

:15:59. > :16:03.story. A new report from the National

:16:04. > :16:06.Infrastructure Commission says the UK ranks 54th in the world

:16:07. > :16:10.for 4G connectivity. Yes, according to the league table,

:16:11. > :16:12.Britain's coverage falls behind country's such as Romania,

:16:13. > :16:20.Albania and Panama. South Korea is planning to have 5G

:16:21. > :16:24.rolled out by 2020. The Commission is calling on the UK

:16:25. > :16:27.to focus its investment on its 5G infrastructure instead,

:16:28. > :16:29.and get it rolled out seamlessly Lord Adonis is the chair of the

:16:30. > :16:43.National Infrastructure Commission. There is a lot to talk about. It is

:16:44. > :16:48.interesting, if you make the comparison with speeds in the UK

:16:49. > :16:56.against elsewhere, we are lagging behind. But it into context. We were

:16:57. > :17:01.slow in introducing 4G, slower than the United States, which had a

:17:02. > :17:06.five-year march. Coverage is poor. We 54th in terms of the quality of

:17:07. > :17:11.coverage. For a typical user, how much of the time can you get 4G

:17:12. > :17:17.connectivity, it is barely half the time. We need to make big further

:17:18. > :17:22.investments to raise our game, and a lot of the infrastructure for 4G can

:17:23. > :17:28.then be moved across to 5G, which needs to happen as early as possible

:17:29. > :17:37.so we are not behind. People say if they are struggling to get 4G at the

:17:38. > :17:40.moment, why are we talking about 5G? The investment we need is in 4G, to

:17:41. > :17:48.get the current state-of-the-art service. Putting that investment in

:17:49. > :17:54.place, amongst the worst coverage is on the trunk, train and road

:17:55. > :17:58.systems, where they are not covered by existing targets. There should be

:17:59. > :18:02.proper provision in place with highways England and Network Rail

:18:03. > :18:06.setting a standard and getting the private sector to deliver. And then

:18:07. > :18:13.that can be transferred across to 5G. This is not either or. Getting

:18:14. > :18:18.decent quality coverage for today is essential to being ahead of the game

:18:19. > :18:23.tomorrow. This matters, because we have nearly 2 billion rail users a

:18:24. > :18:28.year, hundreds of people travelling to work, if they can get on a train,

:18:29. > :18:34.and they use it as their office. If they can't get connected, it is a

:18:35. > :18:38.huge productivity problem. When I am not connected and I tried to get

:18:39. > :18:44.somewhere and I need my 4G to tell me how to get there, I get lost,

:18:45. > :18:49.because there is no connectivity, so I am following a map and it stops

:18:50. > :18:55.working. In the Autumn Statement Philip Hammond announced money for

:18:56. > :19:01.this, ?1 billion to boost the UK digital connectivity. Is that

:19:02. > :19:07.enough? That is very welcome. It will enable us to do big pilot

:19:08. > :19:11.rejects for 5G, selecting towns and cities and putting the

:19:12. > :19:15.infrastructure in place early so you can start looking at applications,

:19:16. > :19:19.what you can do in terms of connected vehicles are sending data

:19:20. > :19:24.to people much faster, which will encourage new companies to come in.

:19:25. > :19:27.But most investment will not come from the Government, it comes from

:19:28. > :19:36.the private sector, paid for through bills. That will be billions. When

:19:37. > :19:42.will 5G be reality in the UK? In 2019 the international standards are

:19:43. > :19:47.likely to be set. Once that starting gun has been fired, the question is

:19:48. > :19:51.who can move fastest. With 4G we were very slow, the regulator was

:19:52. > :19:55.behind the curve, which is part of the reason why we are still 54th in

:19:56. > :20:00.the world. We cannot allow that to happen again this time, and

:20:01. > :20:05.especially after Brexit, this really matters. When it comes to

:20:06. > :20:11.priorities, we look at big spending on HS2, the high-speed rail line

:20:12. > :20:17.from London to the north-west, and says, I live in central London, I

:20:18. > :20:22.have poor Internet connectivity, why would 5G make a difference? It is

:20:23. > :20:25.all well and good getting on a train quicker, but if you can work on that

:20:26. > :20:33.train, it would not matter if it took 20 minutes longer. I started

:20:34. > :20:38.HS2, the big argument for it is a similar argument for 5G, capacity,

:20:39. > :20:44.as the population rises, as travel requirements increase, we need

:20:45. > :20:47.significant extra capacity over and above the Victorian railway lines,

:20:48. > :20:54.because the lines we depend upon were built 150 years ago. That is

:20:55. > :20:58.the argument for HS2. If you are going to build these things, you do

:20:59. > :21:03.it to modern standards, it would be ludicrous to build a new railway

:21:04. > :21:07.line like the Victorians did. It is about prioritising what is

:21:08. > :21:13.important. They are both forms of connectivity, it is mobile

:21:14. > :21:18.connectivity, which is vital, downloading large and stuff, and it

:21:19. > :21:23.involves getting from a to B and getting goods from a to B. Both are

:21:24. > :21:31.important. The idea that a modern country can't have both things is

:21:32. > :21:34.laughable. That is not what they say in the United States or Asia. We

:21:35. > :21:39.need to get real and prioritise these investments, some will be born

:21:40. > :21:49.by the taxpayer, some will be born privately. This needs to be worked

:21:50. > :21:53.out, and done. Best of luck with the project, a lot of people will be

:21:54. > :21:57.well connected to this story. From the global bosses we talk to,

:21:58. > :22:00.their frustration when they come here about the fact they are

:22:01. > :22:04.travelling and they can't stay connected. It is a scandalous

:22:05. > :22:08.situation, it needs to be sorted out.

:22:09. > :22:10.In a moment we'll take a look through the business pages,

:22:11. > :22:15.but first here's a quick reminder of how to get in touch with us.

:22:16. > :22:20.Our web page is where you can stay ahead, but all of the braking

:22:21. > :22:25.business news. We will keep you up-to-date with the latest details,

:22:26. > :22:30.with insight and analysis from our team of editors around the world. We

:22:31. > :22:42.want to hear from you as well, get involved on our web page. We are on

:22:43. > :22:45.Twitter and Facebook. On TV and online, whenever you need to know.

:22:46. > :22:47.Joining us is Mike Amey, managing director and

:22:48. > :22:57.I love this one in the Washington Post, it is rare that we talk about

:22:58. > :23:00.a business but says it is very confident, these are small

:23:01. > :23:10.businesses that say 2017 is good for them. It is nice to hear such

:23:11. > :23:15.positivity. Therein lies one of the reasons why things like American

:23:16. > :23:20.equities are high. A lot of the policies that Donald Trump is

:23:21. > :23:27.talking about art pump priming the American economy. That is why do

:23:28. > :23:32.seeing this positive response. This is American small businesses, to

:23:33. > :23:35.make that clear. They employ half of the American workforce, which is

:23:36. > :23:42.pretty significant. We ask viewers to get in touch to say how they are

:23:43. > :23:44.feeling. Hayden says, we are being -- seeing signs that things are

:23:45. > :23:50.improving, hopefully it will continue. It will be interested to

:23:51. > :23:55.see what small and medium-sized businesses thinking here. There are

:23:56. > :24:03.surveys, they don't necessarily split down between small and large

:24:04. > :24:10.businesses. So far the Brexit hit has been quite subdued, and people

:24:11. > :24:18.are looking forward to the future. There is a great story in the

:24:19. > :24:23.Independent, it says Uber employee 's use the app to spy on people. It

:24:24. > :24:30.is to do with a version of the app that staff can access. Uber can

:24:31. > :24:34.track you with the phone, assuming you have the collectivity! If you

:24:35. > :24:43.don't want to be tracked, go down the trunk roads! Uber has an app,

:24:44. > :24:47.where they can follow you, if it is that appropriately, so there is an

:24:48. > :24:51.issue there. But Uber, they want to know where people are going, but it

:24:52. > :24:55.is about who has access to that information. Uber want to know where

:24:56. > :25:01.people go so they can optimise where their cars. There is a good business

:25:02. > :25:09.reason for it, the issue is, who has access? The access may be more

:25:10. > :25:12.widespread. It was called the godly mode, and they have changed the name

:25:13. > :25:26.to something else. Heaven view. Both idea. It is one of those... Uber is

:25:27. > :25:30.growing and growing. I guess you have to think about your HR

:25:31. > :25:34.policies, that they are in line with the growth, and sometimes they are

:25:35. > :25:37.way behind. You have to think about the number of people who have access

:25:38. > :25:40.and the information they have access to. If it is a small company, it is

:25:41. > :25:46.a different operation.