10/01/2017 BBC Business Live


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This is Business Live from BBC News with Rachel Horne


The leader of the world's biggest economy gets ready


What will the world make of the Obama legacy?


Live from London, that's our top story on Tuesday 10th January.


The US economy has grown, but wage growth has lagged behind.


We'll assess the impact of the Obama Presidency.


We also have news from the world's second-biggest economy.


The goods it makes might be about to get more expensive.


Stay tuned to find out what that could mean for you.


The Ftse chalked up its tenth straight daily session


Are you taking a break from the booze after the excesses


We'll meet one man who hopes to turn abstinence into


But can non-alcoholic drinks really take over from the real thing?


During yesterday's metro strike in London, Uber prices


Are companies right to reflect increased demand?


Or do price hikes leave you feeling ripped off?


There are just a couple of weeks of Barack Obama's Presidency


remaining, and later today he gives his big farewell speech.


As well as being commander in chief he's also overseen


the world's biggest economy for the last eight years.


Well, since his inauguration in January 2009 more than 11 million


jobs have been added, with the unemployment rate


It peaked at 10.0% in Obama's first year in power.


The typical American family brings home nearly $54,000 a year.


That's almost exactly the same as 20 years ago,


Wage growth has been very low under Obama,


and has been called the "missing piece" of the recovery.


The economy has grown about 1.5% a year over


That compares to about 2% under his predecessor George W Bush.


One of the costs of that has been that US Government


debt has nearly doubled, from $10 trillion to $20 trillion,


during Obama's eight years in the Oval Office.


Marianne Schneider-Petsinger, US geo-economics fellow


at Chatham House, a think tank in London.


If you ask any president, you would not want to take on that economy. If


you were a teacher, you had to grade him on his economic, what grade


would you give him? Overall, let's not forget where he started. When


you talk about the economy, it was on the brink of depression. He


averted that, it was just a recession. Compared to when he took


it over, he has done a solid job, but it was not anything spectacular.


If you compare him to other presidents, he falls in the middle


range. Some may suggest it did not fall into depression because they


threw a lot of money at it. They pumped a lot of money in. Some say


not enough, though. I did not catch the wage growth. It is the missing


link. You have created these jobs, they lost a lot but they created


some. Why hasn't wage growth gone up? Many of the jobs that were


created were in low-wage sectors. There is pressure from overseas and


from technological change, automation is a key worry or stop


many of these jobs had that have been created are part-time. Many


people feel they are not making headway. There are a number of


issues that go together. How do you think Barack Obama will be feeling?


There are a lot of big issues, like his health care or trade deals,


which may not be lasting. How will he look at this? He hopes that with


some Democrats still in support of the things he has done, they will be


attempts by the Donald Trump administration to overturn them, to


chisel them down, but we will see, it is an open question. We have


spoken before, looking forward, Donald Trump and his economic


policies, there is a lot that people would look favourably on. Animal


spirit is back. In terms of the promised tax cuts and cutting down


on regulation. Businesses react favourably to that. They question


whether he can deliver on many of those promises.


Two prototype models of a highly-anticipated gaming


laptop have been stolen at the Consumer Electronics


They belong to the gaming company Razer, and each


It's the first portable laptop of its kind.


Razer said the devices were taken from its press room on Sunday,


and the Chief Executive Min-Liang Tan said they were treating the case


Volkswagen's chief executive for the North America region says


the company was "surprised" by the criminal charges laid


against the executive in charge of complying


The German carmaker has admitted installing secret software


On Monday Oliver Schmidt appeared in court in Miami charged with fraud


He chose not to enter a plea and was remanded in custody.


There are question marks about the future of Yahoo's


influential chief executive Marissa Mayer after it was revealed


she will not serve on the board of the company that is left behind


once Yahoo's core assets are sold to Verizon.


Five other directors will also not serve on the board.


We are looking at our web a cracking site. We will work with our UK


audience later, but Snapchat, or the company Snap, which owns it, they


are choosing the UK for anything outside the US.


It is a vote of confidence in the UK. If those companies come to


Europe, they go for Ireland. Says the Irish lady! Luxembourg, the


Netherlands. Could this be something to do with


the fine that Apple could be facing, 13 billion tax rebate?


It could be. Snapchat expected to go to the market this year.


A big float. It hopes to raise $25 billion.


We've had some numbers out of China which show that the world's


second-biggest economy could be about to push up the prices


of the things we around the world all buy from China.


Sharanjit Leyl is in Singapore and she's got the figures.


Just explain, how could these increases in China affect us as


buyers elsewhere in the world? Will it cause our prices to go up?


Possibly. Let me give you those figures, because they are


interesting. They grew at their fastest pace in more than five


years. The index for December was up 5.5% from the previous year, against


expectations of. That could lead China to export inflation two


nations around the world through its vast supply chains. This may prompt


manufacturers who are enduring those higher input costs to raise their


prices and pass them on to everyone around the world. Whether that


rebound will be sustained depends on how the global economy fares,


possibly under Donald Trump, and whether trade tensions flare between


the US and China. Consumer prices remain stable, rising just over 2%.


Others say that is an indicator that the real inflation seems restricted


to the industrial sector. Hard-hit is the mining sector, prices surged


over 21% in December from a year earlier.


The US dollar started 2017 at a high but it's been sliding,


along with the Dow on Wall Street, which closed down yesterday.


And Asian stocks were mixed, with a decline in Japan.


The Nikkei pretty flat, offsetting gains in Hong Kong,


This week we should keep an eye on the oil price.


It crept back up today after a fall on Monday over concerns


about whether output cuts by major exporters will be enough to support


the oil market as other producers have increased supplies.


And Samira Hussain has the details about what's ahead


More automotive news happening, General Motors will be telling


investors what they can expect from the number one American auto-maker


in 2017. Top officials will present the company's financial outlook at a


butcher bank conference in Detroit. It is held at the same time as the


Detroit auto show. Also happening, the Ford motor company CEO will


outline forecasts for 2017 financial performance at a conference during


the Detroit auto show. Investors will be watching for news on 2017


American market forecasts, as well as the outlook for Asia and Europe.


And Barack Obama will deliver his farewell address in his home city of


Chicago. Joining us is James Bevan,


chief investment officer at CCLA We want to talk about the American


market. But let's talk about the FTSE 100, the main market in London.


One record after another, but this is a story about the pound. The


pound goes down in value, the FTSE goes up. A very large chunk of the


earnings are overseas, either through export all through selling


overseas, and bringing the earnings back. Whenever the pound goes down,


profits go up, and vice versa. More bang for the buck. The American


markets, all eyes are on January the 21st, the President-elect takes


over. In the UK we have the weakness of the pound, in the US we have a


strong dollar, and many people think, if you are going to talk


about markets going up on the weakness of the pound, white is it


that American equities have gone up with a strong dollar. Donald Trump


is promising to cut tax substantially. Corporate earnings


will rise because the Government will take less money. If you join


and you should be tax cuts passed and you should be tax cuts passed


straight through to the bottom line is terms of earnings, the index goes


all the way. It is an overly optimistic perspective, but if you


said, let's cut the difference between some deflation of the


optimism and a revaluation on the back of that earnings numbers, maybe


2500. Looking at how the markets have gone up in the States, a lot of


it is on sentiment, we now know Donald Trump will be the president,


and he will invest in infrastructure and cut down on regulation and


taxes. Once he is in power and things either do or don't begin to


happen, at one point -- at what point will be see a reality check?


Have at least six months, because he will have to take the tax cuts right


through the process, and we don't know if you will backdate them to


early 2017 awful the date them to 2018. But the markets would begin to


focus anyway forwards. All of the sentiment we have had for the global


economy has been good, that has to remain in place, because it fits


begin to slide back down the hill, no matter of cutting taxes will lead


to better numbers. The US equity market is looking for 5% growth this


year and next year, and that is what we have to focus on. We will see you


shortly. We're all getting a lot more health


conscious these days, but can non-alcoholic drinks really


take the place of booze? We'll hear from a man who's hoping


to capitalise on the trend You're with Business


Live from BBC News. Snap, the company behind


messaging app Snapchat, is setting up its international HQ


in Britain, where it will book Many tech firms have


preferred Ireland, Luxembourg or the Netherlands


as their European tax base. Theo Leggett is in our


business newsroom. Snapchat, why this decision, it


bodes well for the UK economy and for London? A lot of social media


companies like Facebook and Google have run into trouble over setting


up tax bases in lower tax jurisdictions in Europe and then


diverting profits from other large markets into those jurisdictions in


order to minimise their tax bills. So schnapping is not doing that.


They are setting up in the UK and they're channelling the profits from


the UK first of all, but also from other countries where they don't


have a major base and that includes Australia and Saudi Arabia and


paying tax on them in the UK. Now, that tax bill at the moment won't


actually be very high because Snapchat's revenues are not that


high at the moment, but it is expanding rapidly. It is taking on


more advertising and it is expecting its revenues to go up in the near


future so there will be more money coming in and the money will be


going through the UK. Let's not forget. The UK itself as a major


economy has a low corporation tax rate. 20% at moment. It will fall to


17% by 2020. So by doing this, schnapp is avoiding the prospect of


big regulatory problems, like like the UK Government and the European


Commission clamping down on companies which have aggressive tax


policies and at the same time, it's basing itself in the UK where it has


a relatively low corporation tax rate. So I think that's what's


behind it. By the way, some of our viewers may not be familiar with


Snapchat, it is an app aim at younger people. If you're under 25,


you almost certainly will have heard of it. If you're over 30, maybe you


won't, but that's changing as well. Snapchat allows you to take pictures


and videos and send them and then have them deleted. It is becoming


more popular among people the same age as myself and dare I say it, you


too, Aaron. I'm older than you Theo! Thanks, mate.


Morrison, Christmas sales up. They are doing well, aren't they? Good


news for Britain's fourth biggest supermarket.


Our top story, President Obama is getting ready to make


He's expected to focus on his economic legacy especially


A quick look at how markets are faring.


We can see there the FTSE continuing that winning streak up and up,


pretty much every day since the start of the year. It is up almost


0.2%. The DAX up and the CAC down slightly. All the markets keeping an


eye on the oil price which had its biggest fall in six weeks over


concerns that some producers are making too much oil despite the Opec


agreement. You do like the markets! Let's talk


about something more interesting before I spit on the desk!


Now let's get the inside track on distilling and I don't


Herb and plant distillates have long been a medicinal tradition


in the east but when Ben Branson, a British tee-total marketing


executive stumbled across a copy of The Art of Distillation.


A solution to the problem of what to drink when you don't want to drink.


So inspired by craft techniques he set up soft drink


Since then Seedlip has gained investment from drinks giant Diageo


who seem to be betting on the rise of this adult market.


The founder and chief executive of Seedlip,


Guess what, he brought us? Nonalcoholic drinks! Sorry, I'm


probably not your target market here. Welcome to the programme. Are


you serious from a book? I know you've got the book, right? From a


book. Ladies and gentlemen, this book is 1664? The original copy was


1651. We managed to get our hands on a copy from 1664. This is original


recipes, nonalcoholic herbal remedies all the distilling


techniques that I found three years ago. So what prompted you? Was this


something you were thinking I want a business opportunity, I can see a


gap in this market? Was it that you were doing something else that


brought you into making nonalcoholic beverages? It was not a business


gap, business opportunity. Seedlip is just a product of my upbringing.


Halfify family have been farming for over 300 years and we still farm


today and that's really important. The other half of my company are in


brand design. I grew up in the countryside and then went to work in


brand design and I put the two together. You have an unusual, did


you go to university? No. No. You did work experience for a big vodka


company at the age of 14? I was doing work experience for brand


design agencies from the age of 14 and got to work on some fantastic


global brands. And so got a real insight into what it means to create


one. I imagine the biggest booze maker in the world, Diageo,


investing in you, which is kind of strange, but it sort of suggests


this is a growing market? I think we're now in an age... Who are you


targeting? We are in an age where you can go to a restaurant and have


all kinds of food, it doesn't matter what allergy you have got and it


doesn't matter what you want from wherever in the world, if you want


an nonalcoholic cocktail, you can do the same. If you're not drinking for


whatever reason, the options are poor, they are one dimensional and


sweet and fruity and there is no theatre, there is no adult


sophisticated flavour that we're trying to do. You know, I like a


drink. My wife will nod to that. I haven't even tasted this. We've


mixed it with tonic water. They are both mixed with tonic. We have got


two products. Isn't the problem, it is not a problem, the issue, you


were saying, you wanted other options? I have got three children,


every time I was pregnant the offers of what you wanted to drink were


limited. So I can see the appeal of an item like this, but your price


bracket, it is ?27 a bottle. That's expensive. 40 bucks, that's $40 of


the that's pricey. It is pricey. Because it takes us a long time to


make. So we're individually distilling each individual


ingredient. Two of the ingredients come from my farm, my hay, my hand


picked peas, the craft that goes into this and the actual time and


hand labour means that actually we're creating something that's


really grown-up. Here is my point. For a drinker like me, is it all


about the taste? It might be, but you don't get the buzz? You don't


get the feeling. I'm not talking about pregnant. If it is a Monday


lunch time or you're driving or as we are in dry January and you're


having a month off, the opportunity to have a great grown-up


nonalcoholic drink should still be there regardless of drinking for the


effect. I think the effect of wanting to feel part of the group or


wanting to feel like you're not the dummy in the corner drinking orange


juice. This product, that's filling this gap in the market for adult


drinks. There are a lot of other companies rushing in, Britvic have a


company launching a similar sort of, more savoury alcoholic alternative


rather than the fruity ones. We have nonalcoholic wines being introduced


by one of the upmarket cordial companies. Is there room for you as


well? We are the world's first distilled nonalcoholic spirits. So


we are taking the same rituals of a spirit mixer of a vodka and Coke and


of a gin and tonic that sits on the back bar that means you can make


something at home so we're taking that side of the market. I guess we


want to solve the problem of not drinking. If other people are coming


in and helping to build that owication, happy days. Ben Branson,


thank you. You can come back and see me when you've put some alcohol in


that one and we'll talk them. I'm not your target market, I'm sorry!


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.


The Business Live page is where you can stay ahead with the day's


breaking business news. We will keep you up-to-date with the latest


analysis from the BBC's team of editors around the world. We want to


hear from you too. Get involved on the Business Live web page. On


Twitter we're at: You can find us on Facebook:


Business Live on TV and online whenever you need to know.


What other business stories has the media been


James Bevan from CCLA Investment Management joins us again.


James, thank you for hanging around. Now, earlier we asked people to send


in any tweets they might have. We were asking about the Uber story,


there was a Tube strike in London and some Uber charges went up by


500%! Was that supply and demand? Is that fine? Is it OK to cash in? It


is the core part of the Uber business model. Uber pays by the


mile and the time spent behind the wheel and there is a loading factor


to get people to join the ranks of the drivers when demand rises. When


there is a strike in public transport, demand goes through the


roof and hence the loading goes up hugely. Some tweets have said,


"Look, they are really cheap norm times. This is their opportunity to


cash in." There is a legitimate problem when


there was too much traffic and you hope you're going to get a fast ride


and you don't. The road system is not good at coping with huge


volumes. It is not an Uber problem. Another company that is weighing


what is it going to do with president trump's dislike for cars


made in Mexico and sold in the US? It is made in Mexico and sold in the


USment there are successful car companies like Nissan and VW and BMW


that manufacture in Mexico and sell around the world, not specifically


to the United States. However, Ford and GM have definitely decided in


the past that they would want to manufacture cheaply in Mexico and


export to the US and they will have to re-think their strategy. James


Bevan, thank you very much for joining us today.


Thank you for the tweets. We're running out of time to mention them,


but a lot of people saying focus on the taxis as well, not just Uber. I


will. Bye-bye. Hello. It looks as if it will be a


fairly cloudy day for many parts of the British Isles and there is a


chance of rain on a weak weather front for many areas too. But it is


not all doom and gloom. There


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