23/12/2016 BBC Business Live


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This is Business Live from BBC News, with Aaron Heslehurst


As 2016 draws to a close, we'll look back on a year


which featured two events that will shape the global economy


Welcome to Business Live: Review 2016.


This year saw the UK take the momentous decision


We'll take a look at what lies in store in the next 12 months.


Billionaire businessman Donald Trump wins the race for the White House.


He's made some bold announcements, but was it all talk and no action?


And it's been a turbulent year for global markets.


Oil prices hit a historic low, but there's light at the end


of the tunnel, following a landmark deal between members


Exploding phones, driverless cars and virtual reality.


It's been an eventful twelve months in the the world of tech,


but what can we look forward to in 2017?


We'll speak to our resident gadget guru Rory-Cellan Jones.


Welcome to a very special edition of Business Live.


This year saw two of the biggest political results of the decade


as the recent trend towards globalisation


There are now dark clouds of uncertainty hanging over two


of the world's biggest economies - Europe and the United States.


Let's start by looking back at what happened following the UK's


momentous decision to leave the European Union.


Tonight at 10 - the voters decide that, after four decades,


it is time for Britain to leave the European Union.


I don't think it would be right for me to try to be the captain


that steers our country to its next destination.


Across Asia today, we have seen shares fall on the major markets


like Japan's Nikkei, down more than 7%.


Look what happened, it tumbled down to levels we have not


Many people in the financial markets caught, perhaps,


Brexit means Brexit, and we are going to make a success of it.


It is a victory against the big merchant banks, against the big


The end of the day, Jamie Dimon, Lloyd Blankfein,


you want to take your troops from JP Morgan and Goldman Sachs


to Paris, to the Boulevard, have a lovely holiday.


I'll give you a clue, guys - you'll be back.


I'm joined by our economics editor, Kamal Ahmed.


We saw Brexit back in the summer. Looking ahead to 2017, where do we


stand in terms of UK negotiations? Everything looks so uncertain. The


phoney war will come to an end, Britain voted to leave the European


Union in jaw and the practicalities of that will begin next year. -- in


June. The British Government wants to spark Article 50 which starts the


process of exit. By the end of March. That is a two year process so


that should be completed, we think, by 2019. There are tensions on both


sides. In Britain, there are tensions between those who want what


is cold a hard Brexit, fully out of the single market and the Customs


Union, able to sign trade deals around the world itself, with no


reference to the European Union. And those that want a softer Brexit,


still having preferential access to the single market, possibly still in


the Customs Union. That is tension on one side. On the European side,


the 27 other member states, there are tensions between those who want


to ensure Britain does not get a better deal by going out of the


European Union, politically unpalatable as that is, and Britain


is the second largest economy in Europe. They do not want to set up


trade barriers so the European economy suffers by losing the


British market. London, one of the leading global financial centres and


Europe needs the city to front some businesses.


Indeed. Let's bring up the board. I want to talk about the FTSE and the


pound. This is how they have ended as of December 20. The FTSE nearly


13% and the sterling down 16%, we were expecting that. If they vote


for Brexit happens, we would see that pound punch. The judgment was


investors would think assets in the UK would be less valuable in the


future so their money would be better employed on the continent and


frankly in America. And so the pound has fallen in value. What is


interesting and more surprising is how good equities have been and the


markets. In a way, although Brexit is incredibly important politically


and economically, the fundamentals have not changed that much yet. And


so equities remain very quite -- attracted because of the high bloke


interest-rate and loose monetary policy, no signal yet from Britain,


the Central Bank in the UK and Europe that interest rates will rise


soon and quickly. So the equities run has been very powerful, a lot of


those in the FTSE, in the London markets, they are global companies.


Their profits are in dollars so as sterling falls... Their profits have


gone upwards. So there is a situation where those equities are


doing rather well and you have a clash. Equities positive, sterling


has had a tough three months. The European project, how is it


looking going into 2017? Brexit is important but I would not suggest it


is the most important thing in Europe in 2017. You have elections


in the Netherlands and in France and in Germany. And each of those


elections will be a big test about the kind of Europe that the voters


in Europe want. A reformed Europe, high levels of unemployment,


problems with growth. What type of Europe will people who support the


project, windows elections, or will people who want to rip up the


project and cause more tension in Europe and possibly split up the EU,


will they wind? It will be a fascinating year. But the cards on


the table, could we see a European shock like we have seen Brexit and


the election of Donald Trump? We need to be careful, the pull


suggests not, but at the end of 2017, what might be described as the


establishment parties have put themselves back at the centre of


Europe -- the pulls. The European project is incredibly important


European government and at the end of 2017, it is suggested they will


look more victorious than knows what that one to split up the EU. One


thing we learned this year it was do not listen to the pollsters!


Happy New Year! The UK's decision to leave


the European Union certainly surprised global markets,


but investors didn't need to wait In the United States,


the billionaire businessman Donald Trump swept to power in one


of the most divisive political Let's look back at some


of the highlights. Right now, 92 million Americans


are on the sideline, It's a silent nation


of jobless Americans. Donald was one of the people


who rooted for the housing crisis. He said back in 2006, gee,


I hope it does collapse because then I can go in and buy some


and make some money. We will build the wall,


100%, and Mexico will be Just imagine how many more


automobile jobs will be lost We can't continue to allow China


to rape our country. Donald J Trump, billionaire property


developer with no previous experience of public office,


is the 45th President Companies are not going to leave


the United States any more It's not going to happen.


It's not going to happen. Our number-one priority


is going to be the economy, get back to 3% to 4% growth,


we think that is very sustainable, and focus on things


for the American worker. Nice thunderous music. I love the


Pippa Malmgren is a former White House advisor and she joins


You did it! You picked Brexit and Trump.


Yes, it was a big year! Can you do the Lottery numbers?


I know you want to talk about the economic and Trump's vision. This is


what we have been hearing, is the team that he's building, what do you


make of it? The last was Peter Navarro who wrote one of his box,


Death by China. Yes, exactly, he is picking people with very different


points of view. They are going to have a Cabinet that argues which


might not be a bad thing, they will have debates about the right


direction to go. Second thing, the establishment is very upset about


these new people because they are not. And that was the point. The


electorate said, I want the establishment out and something new


that looks after my interests more. That is what I think they are going


to deliver. Someone described this as bonfire of the agencies! Trump


has been brought into literally burn the house down and start again,


reconstruct this thing. And Washington was overgrown in many


ways. Will there be accidents along the way? Every President makes


mistakes and we will see those, certainly. But the upside may be


greater than people expect. Just because they do not like him


personally, the markets were like his policies. We have seen that with


the Dell. The wild card is trade policy and whether that will harm


growth in the future. What is your take on that? Again, I do not know,


these are my personal views, I think that there is a lot of bluster about


trade policy. But in the end, what they want to do is sell more


American birds, have better quality imports. So the end goal is to have


trade. -- American goods. They will not use that word, we will have less


talk about free trade, does it mean something profoundly different?


Maybe not. You cannot cede the US as an island, it has got to trade in


the world. To be fair, less than 10% of US GDP depends on exports are as


a nation, we are incredibly lucky. We can be an engine even if the rest


of the world is not going well, trade is as small part of our


economy compared to most others so that is something to keep in mind.


Thank you very much indeed. Happy New Year.


Still to come: Exploding phones, driverless cars


It's been an eventful 12 months in the world of tech,


but what can we look forward to in 2017?


We'll speak to our resident gadget guru Rory-Cellan Jones.


You're with Business Live from BBC News.


Throughout the show, we've been hearing about how


the events of 2016 are set to the shape the business


Here's the BBC's Theo Leggett with a timeline of key events


In January, President-Elect Donald Trump takes the reigns


in the White House, and onlookers will be keen to see if he follows


through with his plan to restrict trade and inject hundreds


of billions of dollars into the US economy.


Fast-forward a couple of months and we'll see the first big


The UK Prime Minister says she'll trigger Article 50


This is when Britain can start formal negotiations


And we'll begin to see what the new relationship could look


This is, of course, crucial to the future of the EU project.


France is one other country which will be


In April, it'll hold the first round of its Presidential election.


The far-right candidate Marine Le Pen is riding high


on a wave of anti-establishment politics which is currently


The leader of the Front National is a staunch Eurosceptic,


so there could be some further bad news for Brussels if


Recent events have seen Chancellor Angela Merkel come


under fire for her open-door migrant policy.


The public could go to the polls as early as August 27th.


The German leader has seen a steady decline in her popularity ratings


Let's take a look at how markets have fared over


the course of the year, starting with stocks in Europe.


Yes, there you can see sterling down against the dollar by 16%


as a result of the uncertainty surrounding the Brexit vote.


the FTSE gained around 13% this year.


A quick look at US stocks now - the DOW Jones rose


US markets actually broke all records following the US election.


Investors are perhaps anticipating Donald Trump will follow


through with his $1 trillion spending plan and this could provide


And they need it right now. Borrow and build, but maybe they don't need


to borrow? A lot of investors will throw money into construction


programmes. You are watching the review of 2016


on Business Live. The events of the past 12 months


have made for a turbulent At the turn of the year,


the price of oil was already at its lowest point for a decade -


this had investors wondering whether In January, Iran returned


to international markets following the lifting of Western


sanctions and crude fell below $28 dollars per barrel -


but this proved to be short lived. In the first half of the year,


the market rallied as some of that And in September some of the world's


leading oil producing nations managed to reach


a landmark agreement. For the first time in over 8 years,


members of the Opec oil cartel Initially the market had its doubts


that the deal would hold, but after Iran and Saudi Arabia


agreed to resolve their differences, Iain Reid is a senior oil


and gas equity analyst A good Ozzie institution. That is


the key, they have all agreed, but will they stick to that? Yes,


compliance is always the key. As you say, they have not done it for a


while. What encourages the market is that the core countries of Opec, the


Gulf countries, Saudi Arabia, Kuwait, UAE, they make over half of


it and they really have to comply, given their budget constraints. We


think most of the rest of the countries will comply to some


degree. Some are tempted by the slightly higher oil price, to


increase supply and make more money. It has been hard going for countries


in South America, some African countries? Yes, Libya and Nigeria


are coming out of a pretty depressed position anyway. They will be


allowed to increase. There will be some choosing, but there will be a


lot of compliance, I think. We finally saw that announcement, we


have been talking about it for days and weeks in the lead up, they have


made this agreement. But they cut at record levels. Russia was producing


more than 11 million a day, something like that. Does it really


make a big difference? Well, demand is also increasing. Lower prices


means it is cheaper. That demand growth has been good. How long do


think that will last, now prices are rising? Unless there is a recession


in the West, I think there will be a decent amount of growth, which will


increase the wiggle room some of the country's health. The US is also


producing quite a lot of the world us oil. The worry is that with


higher prices they will produce even more. The Americans? Fracking? They


will come into it, and make money. A lot of them shut production when the


prices got too low, but they can switch it on pretty quickly? There


is a finite limit to that, to be honest. With a bit of compliance and


demand growth, I think the oil price will reach $60. Next year? Yes, it


is $55 now. Look at the chart, Brent crude is up 46% in 2016. Predictions


for 2017? Over $60. But not the $100 mark that we have seen before? Not


unless there is a cataclysm, but don't rule that out. But we're not


forecasting that. A nice smooth path up to 70. We will put you back on


next year to see if you are right! In a moment, we'll be talking


tech with our gadget He is taking photos and he will put


it on social media. We are going to take a look at the year in social.


These are daft people in our office playing it!


It changed my life for a week and then, poof, it was gone."


He said it was the best out of this year.


A viewer in Scotland says "No, I would never use a driverless taxi


Mutala in India, "I would be scared to sit in one in India because it


I tweeted this about five o'clock this morning


and had nothing but short, sharp, shrift, responses


2016 has been an eventful year in the world of tech.


As you've just seen, driverless taxis picked up passengers


And the war between Samsung and Apple reached explosive new heights.


We're joined by our technology correspondent Rory-Cellan Jones.


You see that picture? Is this the future? We said that 2016 was going


to be the year of virtual reality. We saw a lot of launchers. I don't


think we have seen mass take-up. What we are now seeing is the


emergence of cheaper forms. This is an example, a cheap headset into


which you put a mobile phone. Much easier to get to grips with. Not as


good as things like Oculus Rift. What does it do? Why are you doing?


You are being transported new worlds. I like the world I am living


in! Good question, but my experience, the first time somebody


does this, I did it with family members, an ageing parent the other


day, they are quite excited by it. My question mark is whether this


will last. The first experience is great and then you do begin to say,


yes, what is it for? It is fun now, but they have to apply to something?


Something constructive? We are seeing augmented reality, putting


virtual object in the real world, the great example was Pokemon Go,


wandering around with phones, catching Pikachu. Microsoft has a


thing that takes virtual objects of a step into the real world. It has a


business application for that. Voice control? Aaron, be quiet. OK,


Google. It works! Happy to help... Be quiet for one moment. Who is Alan


Haselhurst? According to Wikipedia, he is a BBC world television


presenter... It got it! This is an intelligent assistant. It offers


questions like how old is he? We will not go on to that. We


celebrated our 70th birthday this year. We have already seen this year


the Amazon Echo, the voice control speaker taking off. You have a


picture of that. And Google Home. Voice becoming the new interface.


This is a Google mobile phone, using the smart assistant. You also have


Siri in Apple devices and Cortana in Microsoft. It knows when I ask who


Alan Haselhurst is, a good follow-up question, how old is he? Who would


buy these things? They are buying them. These voice controlled


speakers are out there. It's not so much that these are products people


are going to buy, they are out there. They are in the environment,


voice control is becoming a thing. This is stuff, when we were younger,


we would watch science fiction films, they would be on a spaceship,


talking to Alexa or whatever? What amazes me is how blase we are about


it. In Star Trek there were devices where you could speak in one


language and it would come out in another. We got back! -- we got


that! What about driverless cars? It all feeds into the same theme, more


intelligence being built into devices, principally cars. We have


come an awful long way. We are expecting a lot more demos of that


kind at the CES show in Las Vegas. That knowledge leads us into...


About 40 seconds left, into the internet of things? Yes, a bunch of


devices, everything connected to the internet. That is a smart doorbell


with a camera. It will identify who has come to the door and you can let


them in through smartphone. Smart lighting, that you can control


through the mobile phone. Drones. You said you wanted one before I


came on. A lot more in the sky. Rory turns on his Christmas tree lights


through his phone. Hey, Siri, to the Christmas lights on. We love you, in


the non-biblical sense, thanks for joining us. See you in the New Year.


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