04/01/2017 BBC Business Live


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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


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