:00:00. > :00:07.This is Business Live from BBC News with Rachel Horne and Sally Bundock.
:00:08. > :00:10.Are Eurozone's prospects beginning to inflate?
:00:11. > :00:13.In a few hours we find out if price rises in
:00:14. > :00:31.Live from London, that's our top story on Wednesday 4th January.
:00:32. > :00:34.Will inflation continue its march towards the European
:00:35. > :00:43.Reports suggest the Japanese company could draw a line
:00:44. > :00:45.under its faulty airbags saga, but how much will it cost?
:00:46. > :00:57.We'll cross live to Asia with the latest.
:00:58. > :01:04.The European markets have opened. The FTSE is slightly down. We will
:01:05. > :01:06.bring you more figures throughout the programme.
:01:07. > :01:08.Turning back time on a family business.
:01:09. > :01:11.Later in the programme we'll speak to the young entrepreneur who's
:01:12. > :01:14.hoping to revive the watch-making company set up my his ancestors.
:01:15. > :01:16.And according to the Trade Union Congress, today's the day that
:01:17. > :01:20.an average Chief Executive in the UK has earned as much as an average
:01:21. > :01:22.worker in a whole year, so we want to know,
:01:23. > :01:40.In a few hours we'll receive the latest inflation figures
:01:41. > :01:47.The block managed growth of 0.3% in the third quarter of last year
:01:48. > :01:50.and a sustained rise in prices could lead to the scaling back
:01:51. > :01:53.of the European central Banks de facto money-printing program.
:01:54. > :01:59.As you can see here, there has been a marked improvement
:02:00. > :02:03.in the rate of inflation for the block and in yellow you can
:02:04. > :02:05.see the 1% inflation rate that Economists are predicting
:02:06. > :02:12.Although this is still some way below the European Central Bank's
:02:13. > :02:15.target of just under 2%, it's still a marked improvement
:02:16. > :02:22.Back in February of last year, the Eurozone was actually suffering
:02:23. > :02:29.But since then, the value of oil has more doubled and this has fed
:02:30. > :02:33.Looking forward, many experts expect the US dollar to continue
:02:34. > :02:35.strengthening against not only the Euro, but against nearly
:02:36. > :02:42.Again, this feeds into the oil price story as a stronger dollar pushes up
:02:43. > :02:56.With me is our economics correspondent Andrew Walker.
:02:57. > :03:02.Rachel outlining the reason why we are seeing such a leap in December.
:03:03. > :03:08.Presumably that could continue this year? Indeed, the price of crude oil
:03:09. > :03:12.started the year on a strong note as markets with thinking that perhaps
:03:13. > :03:17.the agreement by Opec, the oil producers group, with some
:03:18. > :03:21.nonmembers to restrict supply in the New Year and that would bite. It
:03:22. > :03:29.does seem to have reinforced a price that is already well up from below.
:03:30. > :03:33.It is only half the level it was in 2014. But there is the prospect for
:03:34. > :03:37.further increases in energy prices paid by consumers and therefore any
:03:38. > :03:43.further increase in the headline rate of inflation. Let's look at the
:03:44. > :03:49.other rate of inflation without oil, what is it telling us? Things are
:03:50. > :03:54.remaining in the Eurozone, pretty subdued. What we are expecting is no
:03:55. > :04:03.change in that rate, not .8% is among recent figure. -- 0.8%. We
:04:04. > :04:08.expected to stay at about the same level. The European Central Bank,
:04:09. > :04:15.and it does care what the headline rate is, but the story that also
:04:16. > :04:19.indicates more about the strength of inflationary pressures generated
:04:20. > :04:23.within the Eurozone economy itself, is that underlying rate. I think it
:04:24. > :04:29.is telling us demand across the Eurozone does remain a bit subdued.
:04:30. > :04:34.What kind of a year can we expect from an economic point of view? We
:04:35. > :04:39.have this situation of inflation being pushed up by the price of oil
:04:40. > :04:42.but everything is substituted, elections in France and Germany and
:04:43. > :04:55.often the economy is a factor for voters? And the fact is you have a
:04:56. > :04:58.rise of anti-euro and anti-forces in those political systems has the
:04:59. > :05:01.potential to create a lot of uncertainty that will hang over
:05:02. > :05:09.economic life. Another point worth bearing in mind, in terms of
:05:10. > :05:12.avoiding deflation, this rise in inflation is welcome to the European
:05:13. > :05:18.Central Bank. When wage growth is pretty subdued as well, it does mean
:05:19. > :05:22.it will hold back on consumer spending power. The rise in
:05:23. > :05:28.inflation is not an unambiguously good thing. So the EU will not
:05:29. > :05:34.change its plan for tapering back in April in terms of the money it is
:05:35. > :05:37.pumping in? No, but there have been calls for some economists in Germany
:05:38. > :05:42.saying it should end this programme in March, as it originally suggested
:05:43. > :05:48.it should do. The German inflation figures were pretty strong, 1.7% but
:05:49. > :05:52.I don't think the ECB is ready to pull the plug yet. Thank you,
:05:53. > :05:56.Andrew. When we do get the numbers, we will fill you in here at the BBC.
:05:57. > :06:00.Ford has said it will cancel a $1.6 billion plant it
:06:01. > :06:02.planned to build in Mexico and instead extend operations
:06:03. > :06:06.The boss of the US car giant, Mark Fields, said the decision
:06:07. > :06:09.was partly due to falling sales of small cars and partly
:06:10. > :06:11.a "vote of confidence" in Donald Trump's policies.
:06:12. > :06:15.The President-elect has criticised both Ford and its rival
:06:16. > :06:17.General Motors over production of models in Mexico.
:06:18. > :06:20.Some British Airways cabin crew are to stage a 48-hour strike
:06:21. > :06:26.Members of the UK's Unite union have rejected a new offer aimed
:06:27. > :06:31.A previous walkout planned for Christmas Day and Boxing Day
:06:32. > :06:39.BA says it will ensure that all their customers can travel
:06:40. > :06:43.Tesla, one of the world's biggest electric car makers,
:06:44. > :06:44.increased vehicle production by 64% last year.
:06:45. > :06:47.The company made almost 83,000 cars in 2016 but missed its delivery
:06:48. > :06:51.target for the final three months of the year.
:06:52. > :06:55.Tesla, which is run by Elon Musk, said that problems with the cars
:06:56. > :06:57.new Autopilot driving hardware had led to the company producing fewer
:06:58. > :07:07.vehicle's than they had previously forecast.
:07:08. > :07:17.There is more competition out there because the world's fastest self
:07:18. > :07:25.driving electric car has been unveiled. The company plans to
:07:26. > :07:28.release the car in 2018 with a range of up to 482 miles.
:07:29. > :07:31.Shares in troubled car parts maker Takata jumped 17% today in Tokyo.
:07:32. > :07:35.This is down to reports of a possible deal with the US
:07:36. > :07:38.authorities over faulty airbags which have been linked to 11
:07:39. > :07:54.We have our guest in our Asia hub today. It has all been about Takata
:07:55. > :08:01.shares sinking dramatically. Will this company draw a line under this
:08:02. > :08:06.saga? We saw Takata car shares rally at the end of last year. It is
:08:07. > :08:12.continuing on the first trading day of 2017 in Tokyo. It is because of
:08:13. > :08:17.reports the company could be settling a US criminal probe into
:08:18. > :08:22.its exploding airbags. It'll be before the Obama Administration
:08:23. > :08:27.leaves office. Part of settlement would include Takata pleading guilty
:08:28. > :08:35.to criminal misconduct and it might have to pay up to $1 billion. South
:08:36. > :08:37.Korea's shipping, once one of the biggest container shipping companies
:08:38. > :08:46.in the world which went bankrupt last you, they surged on their daily
:08:47. > :08:51.limit by 30% because of a possible deal. Thank you for your time.
:08:52. > :08:53.It feels like the markets are still celebrating the New Year.
:08:54. > :08:57.Stocks in Japan up 2.5%, making the biggest gains
:08:58. > :08:59.in about two months, and closing at its highest level
:09:00. > :09:06.Hang Seng was slightly down but the Dow Jones closed up.
:09:07. > :09:09.Investors looking forward to the tax cuts and regulatory
:09:10. > :09:11.reform they believe President-elect Donald
:09:12. > :09:26.Michelle Fleury has the details about what's ahead
:09:27. > :09:46.After a strong 2016, is the party over when it comes to US car sales.
:09:47. > :09:50.Ford said Americans were not buying as many small cars. We should get a
:09:51. > :09:55.clearer picture of the health of the industry were major car companies
:09:56. > :10:03.report their figures later on Wednesday. Minutes from last month's
:10:04. > :10:09.Federal Reserve policy meeting could explain their thinking on how many
:10:10. > :10:14.increases to expect in 2017. In December, America's Central bank
:10:15. > :10:19.raised rates for only the second time in nearly a decade. The head of
:10:20. > :10:24.Friday's job data, look out for a report on employment in the private
:10:25. > :10:44.sector. Quite a busy week in The States. Our guest is from GKFX.
:10:45. > :10:48.Michelle talking about lots of information, employment data at the
:10:49. > :10:54.end of the week, they keep going up. I know the FTSE 100 is down a bit
:10:55. > :11:00.now, but what is going on? It is just record highs after record
:11:01. > :11:06.highs. Are you not loving it, is it not your dreamtime? We want
:11:07. > :11:14.volatility, when the markets go in one way, it gets boring. Less
:11:15. > :11:18.opportunity for money markets? This does not give you any opportunities.
:11:19. > :11:23.Eventually it will turn round and that is the worrying point. Not much
:11:24. > :11:28.substance on the way up, all on the back of Donald Trump winning the
:11:29. > :11:32.election. When it does turn around, and it will sooner or later, when
:11:33. > :11:35.there is no substance on the way up, the downside can be quite
:11:36. > :11:41.aggressive. It is how quickly it can come back down after that. When do
:11:42. > :11:47.you think that will come? Once things start to happen? I would love
:11:48. > :11:51.to know exactly when it will happen, it would make my job incredibly
:11:52. > :11:58.easy. The whole world is waiting for this Dow Jones level. Once it goes
:11:59. > :12:01.to the 20,000 level, there is a lot of profit-taking, people taking
:12:02. > :12:06.their money out and a lot of big orders coming in and that sparks the
:12:07. > :12:16.markets to come lower. We are still quite a way away from there. That is
:12:17. > :12:20.half an hour's work. Check it out, James Hughes is honest. What else
:12:21. > :12:27.are you watching, the equity rallies are a big deal, or oil, the dollar,
:12:28. > :12:31.what else is on your mind? The oil price is the key one. Yesterday we
:12:32. > :12:35.were running very strongly, oil prices fell off a cliff yesterday.
:12:36. > :12:39.We have oil inventories today which could see oil rise again this
:12:40. > :12:46.morning and they could give us a bit more reason why that is going up.
:12:47. > :12:56.Opec deal, non-Opec deals, we have a lot going on. James will be talking
:12:57. > :13:00.about fat cat pay. Turning back time on a family business. Late in the
:13:01. > :13:05.programme we will speak to the young entrepreneur who is hoping to revive
:13:06. > :13:07.the watchmaking company set up by his ancestors.
:13:08. > :13:20.You are with Business Live from BBC News. Next has reported its
:13:21. > :13:26.Christmas sales figures. Overall sales for November and December were
:13:27. > :13:30.down 0.4% and sales for the whole year were down 1.1%. But there are
:13:31. > :13:39.online catalogue service fared better, up 3.6% in 2016. Let's talk
:13:40. > :13:44.to Kate Hardcastle about this. Good to see you. What is going wrong with
:13:45. > :13:52.Next? Their shares down around 11% on the FTSE 100? I cannot say Next
:13:53. > :13:56.has any challenges specific to them. It is the high street and the Battle
:13:57. > :14:02.of sales. 20% of online sales versus heavy discounting from expectation
:14:03. > :14:07.from consumers. Black Friday coming in at the end of November,
:14:08. > :14:10.discounting in that period prior to Christmas and consumers feeling that
:14:11. > :14:15.is the way they want to shop and that is the state of the high Street
:14:16. > :14:19.and the state of retail. When you look at other companies, they are
:14:20. > :14:26.not seeing a similar fall of like Marks Spencer is an Next. Some
:14:27. > :14:30.analysts said they are specific to next and they are not grabbing the
:14:31. > :14:36.interest like they used to do. It is the middle high-street brand, a
:14:37. > :14:40.vanilla brand, not cutting edge of fashion are not discounted heavily
:14:41. > :14:45.enough to appeal to those consumers. The consumers have one set of money,
:14:46. > :14:50.whoever will provide the fashionable goods and excitement, that is where
:14:51. > :14:54.they will shop. You have got to fight hard for the sales and Next
:14:55. > :15:00.are dictating that is what next year will look like. Next also want
:15:01. > :15:04.prices could rise by as much as 5% next year because of inflation, do
:15:05. > :15:11.you think consumers. At that? With an increase in textiles and prices,
:15:12. > :15:14.consumers will be looking for discount, high fashion and they will
:15:15. > :15:18.only buy so much. Increasing prices will not make them buy any more.
:15:19. > :15:24.Kate Hardcastle, thank you very much.
:15:25. > :15:31.Tashi that making headlines for the wrong reasons against. The Japanese
:15:32. > :15:33.media porting they are under fire again for lying about their profits.
:15:34. > :15:40.Read the details on our website. In a few hours' time we'll receive
:15:41. > :15:46.the latest inflation figures The headline rate of inflation is
:15:47. > :15:54.expected to jump to 1%, from 0.6%. This is a significant improvement
:15:55. > :15:56.given that the Eurozone was grappling with inflation
:15:57. > :16:02.through much of 2016. And now let's get the inside track
:16:03. > :16:05.on one entrepreneur's attempt The Fears Watch Company was founded
:16:06. > :16:13.in 1846 and for well over 100 years it produced watches that
:16:14. > :16:15.were designed in England Then, due to lack of interest
:16:16. > :16:20.from the fourth and fifth generation of the family,
:16:21. > :16:21.the business was But in 2016, after a hiatus
:16:22. > :16:26.of some 60 years, the great-great-great-grandson
:16:27. > :16:30.of the company's founder took up the challenge of bringing
:16:31. > :16:36.the brand back to life. Nicholas Bowman-Scargill,
:16:37. > :16:52.director of Fears Watch Company, We mentioned you are a young
:16:53. > :17:01.entrepreneur, 29? 30 next month. Before you started, you were working
:17:02. > :17:06.for Rolex? Yes, I worked in the workshops for five years as they
:17:07. > :17:08.watched technician, doing parts of repairing, but also serving
:17:09. > :17:12.customers, talking to them about their watches, what was going wrong
:17:13. > :17:17.and how to fix it. That is a coincidence, given that you have
:17:18. > :17:23.this heritage and your family. But what prompted you to work at Rolex?
:17:24. > :17:27.I knew half the story. I was aware there had been watchmakers in the
:17:28. > :17:32.family, and I thought it could be a career I could take up, but it was
:17:33. > :17:35.only when I was at Rolex that it became apparent that there was more
:17:36. > :17:41.to the family history. It was over Sunday lunch at the story came out,
:17:42. > :17:45.I had been talking about wanting to set up my own business and my mum
:17:46. > :17:51.said, why don't you restart the family company? Doing a start-up is
:17:52. > :17:56.one thing, but restarting a business like this is quite different. Did
:17:57. > :18:02.you have any copyright issues? The first thing was to check and make
:18:03. > :18:07.sure I could incorporate the name, but then trade market. With the
:18:08. > :18:13.heritage, it is difficult, because it is a blessing, you have the
:18:14. > :18:17.watches and the story to go back to, but it means you have to be careful
:18:18. > :18:21.that what you are doing is going to last another hundred years, as the
:18:22. > :18:27.company did before. How do you get the interest back? Fears is not a
:18:28. > :18:31.name people will have heard of. It is a great story of hundreds of
:18:32. > :18:35.years ago and a family history, but how do you get yourself on the
:18:36. > :18:41.market when it is so saturated already? Exactly, and there is a lot
:18:42. > :18:48.of interest in things like smart watches as well. But being true to
:18:49. > :18:56.the heritage, the story, that does not mean just putting the date on
:18:57. > :19:00.it, but by going back to the values of the company and certain design
:19:01. > :19:05.elements and the history, bringing those things and updating them for
:19:06. > :19:09.today, people like to look back and see that something has been
:19:10. > :19:14.authentic, it has not just been picked up for no reason. None of
:19:15. > :19:19.your family had an auld Fears watch, so how did you get hold of them? To
:19:20. > :19:24.ones, I first turned to eBay, and ones, I first turned to eBay, and
:19:25. > :19:29.started looking online and came across them. For several years I was
:19:30. > :19:33.picking them up for a few pounds. Since the relaunch of the company,
:19:34. > :19:39.you cannot do that any more, unfortunately. Once I got them, I
:19:40. > :19:42.was inspired to find out more, and then speaking to different family
:19:43. > :19:47.members, I was pleased that nobody else had thought to do the relaunch,
:19:48. > :19:52.but it was nice to find little snippets of information, that a bit
:19:53. > :19:55.of history, everybody started going through all photo albums and started
:19:56. > :20:03.finding of documents and paperwork. It is a reddish story, -- British
:20:04. > :20:13.story, but an element of the watches have to be made in Switzerland? As
:20:14. > :20:16.the case is today, if you want to make a watch in Switzerland, you
:20:17. > :20:21.have loads of companies all next to each other, all in the same region,
:20:22. > :20:24.who make the individual components. To try to do that in the UK is
:20:25. > :20:30.almost impossible. There are people who do it but the watches result in
:20:31. > :20:35.being very expensive. It may get better over time, but for the moment
:20:36. > :20:39.Switzerland is the place to go to. At the moment it is just you, so how
:20:40. > :20:45.do you market? You don't have a marketing or PR team. It is a lot
:20:46. > :20:51.easier than it was five or ten years ago, with social media? Exactly. In
:20:52. > :20:55.the summer last year before I launched, I had several months of
:20:56. > :21:01.building up interest just using Instagram, Twitter, Facebook, using
:21:02. > :21:04.photographs, things from the heritage and the archives, and
:21:05. > :21:10.starting to generate a buzz around it. I had never used Instagram until
:21:11. > :21:16.June, so it was all new to me, but once you get going, it is exciting
:21:17. > :21:23.and creative, and you are getting interest from people. Fears used to
:21:24. > :21:27.export to 95 countries. Today I already have watches on almost every
:21:28. > :21:31.continent. That is largely because on social media you can put out a
:21:32. > :21:34.tweet or photo and somebody in Tokyo can look at it and get in contact
:21:35. > :21:39.with you straightaway, there is no delay. To use a terrible cliche,
:21:40. > :21:47.time will tell! A fascinating story. In a moment we'll take a look
:21:48. > :21:50.through the business pages. But first, here's a quick reminder
:21:51. > :21:59.of how to get in touch with us. PowerPage is where you can stay
:22:00. > :22:02.ahead with all of the day's breaking business news. We will keep you
:22:03. > :22:05.up-to-date with the latest details with insight and analysis from the
:22:06. > :22:10.BBC's team of editors around the world. We want to hear from you. Get
:22:11. > :22:15.involved in the BBC business life web page. We are on Twitter and
:22:16. > :22:33.Facebook. You have been getting in touch with
:22:34. > :22:46.the story we are about to talk about. UK bosses make today, January
:22:47. > :22:51.the 4th, the amount that the average worker would earn in a whole year.
:22:52. > :22:58.That is a staggering statistic. ?28,000. The average wage is ?28,200
:22:59. > :23:03.or whatever, and if you take into account the average pay from these
:23:04. > :23:11.bosses is enormous, around ?5 million a year, from one working
:23:12. > :23:14.week, by Wednesday afternoon they have earned the same amount as the
:23:15. > :23:19.annual average wage, which is staggering. One of the real key
:23:20. > :23:26.things about this, and why people get so annoyed, it is an insane
:23:27. > :23:30.amount of money for anyone, but these people get paid this money
:23:31. > :23:39.whether you succeed or fail. But if it is a listed company and you have
:23:40. > :23:43.shareholders, maybe not. A good example is not necessarily a listed
:23:44. > :23:48.company but a company owned by the Government, RBS and the banks. There
:23:49. > :23:50.is so much public rush on those companies, and it is the companies
:23:51. > :23:56.with public Russia where you will see a EEO who will forego his bonus
:23:57. > :24:01.or will not get paid all of this money. But the FTSE 100 companies,
:24:02. > :24:08.not all of them do that, so there are companies that do not perform
:24:09. > :24:18.well but still pay. When it looked at the average CEO, they measured it
:24:19. > :24:21.as a ?4 million average salary. If you added Martin Sorrell's salary
:24:22. > :24:27.in, it would skew the figures, because he is paid $71 million. He
:24:28. > :24:32.started the company from nothing and built the company up to stop play on
:24:33. > :24:38.the world's biggest advertising agency. Sometimes you can say, OK,
:24:39. > :24:42.if somebody has built up a company to be so successful, you deserve a
:24:43. > :24:45.lot of money, but it is the company where it is more of a Public
:24:46. > :24:53.service, and the companies are not assembly performing well. One person
:24:54. > :24:55.tweeted to say, they still earn less than a footballer. If they create
:24:56. > :25:00.jobs and wealth for others, it is fine.
:25:01. > :25:05.One person says, as long as they are held accountable by shareholders,
:25:06. > :25:08.they are worth it, but then some others say, nobody brings that much
:25:09. > :25:15.value to a company or needs or deserves a salary so high. Total
:25:16. > :25:17.mixed opinion. Let's look at another story, getting talent from students
:25:18. > :25:23.in China. Do you play golf? Yes, and if you
:25:24. > :25:29.watch on TV there is an enormous movement of people from China, South
:25:30. > :25:34.Korea, the far east, playing golf and being incredibly good at it. One
:25:35. > :25:39.every where it is massive if the women's game. The LPGA tour is
:25:40. > :25:44.dominated by people from the Far East. The young golfers are getting
:25:45. > :25:51.scholarships to study in the United States, which is fantastic. If you
:25:52. > :25:56.can do it, do it. I wish I could! That is it. There is more business
:25:57. > :25:59.news through the day on the BBC life web page and on world business
:26:00. > :26:09.report. See you again tomorrow, goodbye.
:26:10. > :26:17.It is a bit cloudy now, but we have lots of sunshine in the forecast
:26:18. > :26:18.today. Tonight it will