20/12/2016 BBC Business Live


20/12/2016

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This is Business Live from BBC News, with Sally Bundock

:00:00.:00:07.

Are we seeing the green shoots of recovery for the world's

:00:08.:00:11.

The Bank of Japan speaks of better times ahead following a fall

:00:12.:00:16.

Live from London, that's our top story on Tuesday 20th December.

:00:17.:00:36.

Could the shock election result in the US provide a boost

:00:37.:00:39.

Cyrus Mistry finally steps down from the boards of Tata companies,

:00:40.:00:49.

Markets in Europe hold steady despite the geopolitical concerns,

:00:50.:01:07.

intensified by events in Berlin and Ankara. We will tell you all we need

:01:08.:01:09.

to know. How do online retailers compete

:01:10.:01:11.

when a new start-up can set up We'll be speaking to the founder

:01:12.:01:13.

of a fast-growing fashion And if you'd like to get in touch

:01:14.:01:18.

about any of the stories covered in today's show,

:01:19.:01:22.

we'd love to hear from you. 2017 is looking like a brighter

:01:23.:01:26.

year for the world's The Bank of Japan says the recovery

:01:27.:01:49.

is now a moderate trend in a sign of better times for the rest

:01:50.:01:54.

of the world. At the central bank's last policy

:01:55.:01:56.

meeting of the year, they kept interest rates

:01:57.:01:59.

at minus 0.1%. The upbeat message was because of

:02:00.:02:05.

a weaker yen and a pickup in demand from abroad,

:02:06.:02:08.

which offer fresh hope for an economy that's been

:02:09.:02:11.

stagnating for more than a decade. In November, the value

:02:12.:02:17.

of the Japanese yen fell by over 9% as investors speculated that the US

:02:18.:02:22.

central bank would raise interest rates at its policy meeting this

:02:23.:02:27.

month, which it did. The weaker currency has been a boost

:02:28.:02:32.

to Japanese companies, Despite this, there are question

:02:33.:02:35.

marks over the so-called Abenomics programme designed

:02:36.:02:42.

to kick-start the economy. It means the central bank

:02:43.:02:45.

is currently buying around $680 billion worth of financial

:02:46.:02:48.

assets every year. The latest official data saw

:02:49.:02:55.

inflation come in at 0.1%. It's better than it was

:02:56.:03:01.

but still far below the Bank of Japan's target of 2%,

:03:02.:03:04.

and is why the banks says "powerful And there are also concerns over

:03:05.:03:07.

the longer-term "structural reforms" promised by Prime Minister Shinzo

:03:08.:03:15.

Abe. These include measures

:03:16.:03:18.

to improve employment rates Takashi Miwa is chief economist

:03:19.:03:20.

at the Japanese bank Nomura We have got inflation at just 0.1%,

:03:21.:03:44.

and we still have negative interest rates. There is not a lot to

:03:45.:03:47.

celebrate, is there? The weaker yen is a factor. As far

:03:48.:04:06.

as the governor mentioned, the bank of Japan must stay on hold for a

:04:07.:04:12.

while to get the benefit of the depreciation of the currency to get

:04:13.:04:15.

higher inflation in the future. Something that we continuously talk

:04:16.:04:23.

about when it comes to Japanese economic 's is structural reform,

:04:24.:04:29.

like an overhaul of your jobs market, when will Japan accept more

:04:30.:04:33.

immigration to balance the ageing population and workforce? Did you

:04:34.:04:40.

think you will get the reforms under Abe? The Prime Minister is being

:04:41.:04:51.

urged to make structural reforms in the Labour market. Higher wages are

:04:52.:05:01.

crucial, higher growth and higher inflation. What about the effect of

:05:02.:05:11.

Donald Trump in the New Year? He said he wants to pull out of the

:05:12.:05:15.

transpacific partnership, which was imported for Japan, but it looks

:05:16.:05:18.

like Japan could get a boost from his policies? We are expecting

:05:19.:05:26.

something positive will be coming out from Donald Trump. The situation

:05:27.:05:36.

is uncertain at the moment, whether he will have a protectionist

:05:37.:05:40.

approach or not. Japanese businesses are still waiting to make business

:05:41.:05:48.

president to come in the next year. president to come in the next year.

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In a nutshell, what shall outlook for 2017 for Japan? We expect that

:05:54.:06:01.

the Japanese economy will go on a gradual recovery. The uncertainty is

:06:02.:06:13.

quite high. The risks are from the US and from China and Europe.

:06:14.:06:23.

One other story we're keeping an eye on is the events in Berlin.

:06:24.:06:28.

The authorities there are questioning a man they believe

:06:29.:06:30.

intentionally drove a truck into a crowded Christmas market.

:06:31.:06:36.

At least 12 people were killed, and nearly 50 have been injured,

:06:37.:06:39.

The truck crashed into people gathered around wooden stalls that

:06:40.:06:44.

were serving mulled wine and sausages at the foot

:06:45.:06:48.

of the Kaiser Wilhelm church in west Berlin.

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Police are now describing the incident as a "suspected

:06:54.:06:55.

We have a special page on our website for what is going on in

:06:56.:07:09.

Berlin. It covers any new developments, any information

:07:10.:07:13.

regarding that particular event. To take a look at our website, we are

:07:14.:07:22.

updating it all the time. German TV says special forces have

:07:23.:07:28.

searched an airport hunger at the temple Hof airport. They says they

:07:29.:07:33.

have had their first hot leader following the incident.

:07:34.:07:39.

Keep across everything as when we receive it.

:07:40.:07:41.

There's been another twist in the Tata saga in India,

:07:42.:07:44.

with the ousted chairman of Tata Sons, Cyrus Mistry,

:07:45.:07:47.

resigning from the boards of all Tata Group companies.

:07:48.:07:50.

His move came ahead of several extraordinary general meetings,

:07:51.:07:52.

which had been called to remove him.

:07:53.:08:04.

What is the latest on that? His decision to resign from all Tata

:08:05.:08:15.

companies, ahead of these meetings, has come as a prop's surprise, but

:08:16.:08:21.

they are still going ahead with the meetings. There was one scheduled

:08:22.:08:28.

for the hospitality company, they are holding their meeting today.

:08:29.:08:38.

Tomorrow Tata Steel will hold one. Tata don't want him to have the

:08:39.:08:42.

final word, there want to put forward the reasons why they took

:08:43.:08:48.

the decision, and they want to show that shareholders are on their side.

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It will give a chance for shareholders to come forward and

:08:55.:08:57.

express their point of view. There have been concerns about the way the

:08:58.:09:02.

battle has played out in public. Tata has a very good image when it

:09:03.:09:10.

comes to the public, but given that the warring factions put so many

:09:11.:09:14.

allegations in the public domain, it has tarnished their reputation. We

:09:15.:09:22.

will rely on you in Mumbai to keep us a cross that. The markets in Asia

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wobbled a bit due to what is going in -- on in Berlin and Ankara.

:09:31.:09:39.

Hopefully my team can fix the black screen. The markets in Europe

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slightly up, we will hopefully bring the numbers to do. Holding steady.

:09:46.:09:51.

The big movers on the FTSE 100 is the Lloyds Banking Group, up 1%,

:09:52.:09:57.

they are buying a UK credit card company. They are wheeling and

:09:58.:10:01.

dealing, and that stock is on the move.

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Joining us is Trevor Greetham, head of multi-asset

:10:08.:10:08.

I want to talk about the Italian banks, they have been in the

:10:09.:10:24.

spotlight for some time, they are sitting on $400 billion of bad debt.

:10:25.:10:34.

might have to step in, they are might have to step in, they are

:10:35.:10:37.

talking about passing a vote to raise 20 billion euros. Is that a

:10:38.:10:45.

bailout? It is nationalisation? They are trying to navigate the EU rules

:10:46.:10:50.

on state capital injections. If they inject capital into the bank, they

:10:51.:10:56.

have to share the pain with some of the bondholders. The Italian

:10:57.:11:01.

Government stuck between a rock and a hard place. If they were to let a

:11:02.:11:05.

bank fail, there would be depositors losing money, if they bail a out,

:11:06.:11:10.

bondholders lose money. That is a bail in. A lot of the bondholders in

:11:11.:11:18.

Italy in particular or individuals. They make themselves unpopular with

:11:19.:11:22.

savers or savers. They have a tricky situation. They are trying to

:11:23.:11:28.

encourage private sector capital to come in, but so far, since 2009, the

:11:29.:11:33.

bank has had 4 billion euros of public money and 8 billion euros of

:11:34.:11:38.

private money, it is looking for another five, and it is touch and

:11:39.:11:43.

go. What Italy needs is some growth and inflation. And some structural

:11:44.:11:48.

reform may be? That would help, but getting growth and inflation going

:11:49.:11:52.

when you cannot weaken your currency is fickle. You could see the

:11:53.:12:00.

political tension. We had the bank of Japan meeting, the last of the

:12:01.:12:03.

central banks to meet this year. China releasing its growth figure

:12:04.:12:09.

that it expects to hit next year. 6.5%. It is always 6.5! The Chinese

:12:10.:12:17.

economy grows rapidly and slows down, there are interesting things,

:12:18.:12:20.

but the official numbers never seem to change. Last year, when we kicked

:12:21.:12:26.

off, there was a panic about China having a hard landing and the

:12:27.:12:29.

currency was weak and oil prices were collapsing, but now if anything

:12:30.:12:34.

the issue is the other way around, the economy is strengthening,

:12:35.:12:38.

housing market is booming. We have seen a shift, which is what Beijing

:12:39.:12:44.

has wanted to do. It has not been the factory floor, it is the

:12:45.:12:50.

services. The housing market. A lot of stimulus was thrown at China over

:12:51.:12:53.

the last couple of years, including currency weakness, and they have

:12:54.:12:57.

turned inflationary for the world, and that is why will see interest

:12:58.:13:02.

rates going up and bark -- bond market selling off. If the interest

:13:03.:13:08.

rates go up, that could be a problem.

:13:09.:13:15.

Have a Merry Christmas, it is the last time we will see you before the

:13:16.:13:17.

New Year. How do online retailers compete

:13:18.:13:18.

when a new start-up can set up We'll be speaking to the founder

:13:19.:13:22.

of a fast-growing fashion You're with Business

:13:23.:13:26.

Live from BBC News. At this time of year,

:13:27.:13:32.

many of us will be stocking up on drinks and going out

:13:33.:13:36.

for Christmas parties, but what we're choosing

:13:37.:13:39.

to buy is changing. Sales of gin and rum are up by more

:13:40.:13:41.

than 10% in the last year. Steph McGovern is in Warrington

:13:42.:13:50.

at one of the UK's oldest gin distilleries to find out how they're

:13:51.:13:53.

keeping up with demand. Hello. This is one of the UK's

:13:54.:14:09.

oldest distilleries, and they have been making gin here for 250 years.

:14:10.:14:15.

We are here because sales of gin have been increasing, it is really

:14:16.:14:18.

popular now, up 10% over the last year. Joanne is the master

:14:19.:14:23.

distiller. Tell us what goes into gin. It is made of three building

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blocks, spirit, British wheat, water, a local water, and

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botanicals. The only botanical we have to put in is juniper berries.

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They come from the Toscana region in Italy. We also have coriander from

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Morocco and lemon peel from pain. -- Spain. It is hand peeled, sitting

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around in the Spanish sun and peeling those are. It has got eight

:14:55.:15:00.

different botanicals, we will put them in pots. Replace everything in

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there with water and spirits, heat everything up. At 80 degrees that

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alcohol boils and the vapour travels up the column and goes over the Lion

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arm, it's the condenser and into the receiving tanks.

:15:16.:15:21.

Why do you think gin is so popular? It is a versatile spirit. It lends

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itself well to cocktails. It smells lovely in here today. That's it from

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me here at one of the UK's oldest gin distilleries.

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That was Steph, of course, who looks completely sober. I'm glad I didn't

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do that OB! There is a lot of detail on the

:15:52.:15:55.

website. Second day of strikes. Hundreds of workers on strike again

:15:56.:16:00.

today for the Post Office and Southern Rail guards as well. Keep

:16:01.:16:05.

up-to-date. The poor people that rely on Southern Rail, I tell you

:16:06.:16:07.

what, tough times. Our top story, 2017 is looking

:16:08.:16:15.

like a brighter year for the world's The Bank of Japan says

:16:16.:16:20.

its recovery is now "moderate" The upbeat message was attributed

:16:21.:16:25.

to a weaker yen and a pick up A quick look at how

:16:26.:16:31.

markets are faring. Holding steady given events going on

:16:32.:16:52.

in Europe at the moment. There is talk of the Santa rally which is

:16:53.:16:56.

historically a period of time where markets head higher in the run-up to

:16:57.:17:00.

Christmas and in the funny week between Christmas and New Year when

:17:01.:17:03.

some markets are open for short periods of the there is a lot of

:17:04.:17:06.

distortion on markets because of thin trade. But that's how they are

:17:07.:17:08.

at the moment. For a boutique fashion retailer -

:17:09.:17:11.

trying to expand by opening new outlet stores can

:17:12.:17:14.

be incredibly expensive. The costs of new leases,

:17:15.:17:17.

staff and additional merchandise can One website trying to make it easier

:17:18.:17:20.

is Farfetch, but for a price. The firm sells goods from almost 500

:17:21.:17:31.

boutique stores to customers Last year it saw sales rise by 70%,

:17:32.:17:34.

reaching more than $0.5 billion. Its clients don't mind splashing

:17:35.:17:39.

the cash with customers on average Jose Neves is the Chief Executive

:17:40.:17:42.

and founder of FarFetch. Good morning. Welcome to Business

:17:43.:17:57.

Live. Can I start with this? What are you? Are you a retailer or are

:17:58.:18:02.

you like a software tech company? We are a platform. We are an E-commerce

:18:03.:18:10.

platform. We are not a retailer. You don't hold any goods. You don't have

:18:11.:18:17.

any stuff in terms of infantries sitting in warehouses? No. We

:18:18.:18:21.

connect the most beautiful stars around the world to a digital

:18:22.:18:26.

platform and that allows customers around the world to shop the streets

:18:27.:18:30.

of London, Paris, Milan, Tokyo and Calais. The logistics of this, like

:18:31.:18:39.

getting it to the, all the items could be in one country and I order

:18:40.:18:48.

from a boutique. The logistics of getting the goods must abnightmare?

:18:49.:18:54.

We ship from 40 countries to 150 with no surprises. Through Customs

:18:55.:18:59.

clearance and local currencies and local payment systems. We have 12

:19:00.:19:08.

offices that we have local teams. So we have local teams in all key areas

:19:09.:19:15.

and they are taking care of our customers and making sure all these

:19:16.:19:20.

logistics are spotless and impeccable. As far as you're

:19:21.:19:28.

concerned, you were coding at the age of nine and you grew up in a

:19:29.:19:33.

fashion world, didn't you, really? You designed your own shoes

:19:34.:19:36.

initially which are still selling today, aren't they? The brand is

:19:37.:19:43.

Swear? Yes, I started programming computers. It was my passion since I

:19:44.:19:47.

was a little kid and at the age of 19 I started my own business. Being

:19:48.:19:51.

from the north of Portugal there is a big fashion cluster. It is close.

:19:52.:19:58.

One hour drive from the largest fashion company in the world. My

:19:59.:20:04.

actual customers, when I was a programmer were fashion businesses

:20:05.:20:06.

that got me close to fashion and fell in love with that industry and

:20:07.:20:11.

came to London in 1996 to design and start my shoe label and that's it.

:20:12.:20:16.

We often use the word because it is banded around quite a bit, unicorn a

:20:17.:20:21.

company that's valued at $1 billion before it goes to the markets.

:20:22.:20:25.

That's you guys are. Is that a help or a hindrance? Obviously, it is

:20:26.:20:35.

good for media. It gets media attention. It gets some media

:20:36.:20:39.

attention and quite frankly it is good for recruitment because if

:20:40.:20:46.

you're trying to recruit someone that doesn't necessarily know about

:20:47.:20:53.

your company, they Google it and see there was significant valuation

:20:54.:20:56.

event throughout the company. But that's it. That's not what we care

:20:57.:21:00.

about. Just briefly, you're Portuguese. You lived in the UK,

:21:01.:21:06.

well in London for over 20 years and you employ many overseas, but in the

:21:07.:21:10.

UK alone 300 odd people. Yes. You're wondering if you will be able to

:21:11.:21:14.

stay, aren't you, depending on how Brexit goes? Well, the worry is more

:21:15.:21:21.

long-term. So 50% of our workforce here in London is not British. Not

:21:22.:21:30.

by design. It is because we found the best dofrles or the best fashion

:21:31.:21:36.

merchandisers or from Sweden or from the West or from Spain or wherever

:21:37.:21:42.

they are. That's the key concern. I often joke I wouldn't have, if there

:21:43.:21:47.

was a points system I wouldn't be given a visa package! Surely you

:21:48.:21:51.

would get the points if you employ 300 people. At the time, I wouldn't.

:21:52.:21:56.

Back then, you wouldn't. You're here 20 years, you are part of the

:21:57.:22:03.

furniture! You would hope so. Say merry Christmas in Portuguese.

:22:04.:22:18.

In a moment we'll take a look through the Business Pages but first

:22:19.:22:21.

here's a quick reminder of how to get in touch with us.

:22:22.:22:24.

The Business Live page is where you can stay ahead. We will keep you

:22:25.:22:32.

up-to-date with the latest analysis from the BBC's team of editors

:22:33.:22:35.

around the world. We want to hear from you too, get involved on the

:22:36.:22:41.

BBC Business Live page. On Twitter we are at:

:22:42.:22:45.

You can find us on Facebook at: Business Live on TV and online

:22:46.:22:47.

whenever you need to know. The BBC's Dominic

:22:48.:22:52.

O'Connell is with us. This result in France regarding

:22:53.:23:03.

Christine Lagarde and allegations when she was Finance Minister and

:23:04.:23:08.

they have decided she was in the wrong. There was a criminal case. No

:23:09.:23:15.

fine and no sanction. No sanction at all. The IMF said, "We are sticking

:23:16.:23:25.

by her." Not long ago she took over from Dominique Strauss-Kahn. He left

:23:26.:23:28.

under a cloud. He was not convicted of anything. She has bvenlt after

:23:29.:23:34.

allegations of assault against a New York hotel maid. There is something

:23:35.:23:38.

about IMF and French politicians, but you can understand why the IMF

:23:39.:23:43.

have done it, the Trump presidency, they don't want to be looking for a

:23:44.:23:50.

new managing director right now. Is she regarded as somebody who does a

:23:51.:23:55.

good job? She is a good figure head for the IMF, she is instantly

:23:56.:23:57.

recognisable and very, very quotable. She is great on media. All

:23:58.:24:03.

these things make her a good head for the IMF, you might say the IMF

:24:04.:24:08.

hasn't covered itself in glory over the last few years, but she is

:24:09.:24:13.

regarded as a safe pair of hands. It would have been a surprise if they

:24:14.:24:17.

had to get rid of her. A conviction is a conics even if there is no

:24:18.:24:22.

penalty. Monopoly set-up a helpline to stop bust-ups at Christmas time.

:24:23.:24:27.

We play it our home. Do you have bust-ups? It can cause real dos. Do

:24:28.:24:35.

you play it? This is a PR stunt. It is open for two days. Which two

:24:36.:24:42.

days? It opens on Christmas Eve and finishes on Boxing Day. But really

:24:43.:24:47.

it is just a PR stunt, Hasbro who makes Monopoly would love if people

:24:48.:24:53.

play it. These days they are more likely to be on digital games. Is it

:24:54.:24:58.

not so popular just like Lego. It goes on and on, Monopoly? There is a

:24:59.:25:04.

kids version of Monopoly which doesn't have the nasty little rules

:25:05.:25:07.

and it is over in 15 minutes. The key is you want the yellow ones, the

:25:08.:25:12.

green ones and the dark blue ones. Yeah. The most expensive. Purple

:25:13.:25:17.

then! Park Lane. I like coming off when

:25:18.:25:22.

you come around the purple and the orange. You are the dog. Don't you

:25:23.:25:28.

have a free parking rule, every time you pay a penalty? This is one of

:25:29.:25:33.

the biggest bones of contention. The biggest thing was people stealing

:25:34.:25:37.

from the bank! 13% of people admit to stealing from the bank! The other

:25:38.:25:44.

thing is what is a free parking rule. I wonder what Christine

:25:45.:25:52.

Lagarde's rules are when she plays? Sally, I wouldn't even go there!

:25:53.:25:56.

That's it for another day. Bye-bye. Bye-bye.

:25:57.:26:09.

We're seeing a change to our weather starting today across Scotland and

:26:10.:26:15.

Northern Ireland. Wet and windy weather moving in here

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