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