01/02/2017

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:00:07. > :00:08.This is Business Live from BBC News with Sally Bundock

:00:09. > :00:19.The war of words worsens between the US and European Union -

:00:20. > :00:21.so what does this mean for trade between the world's two

:00:22. > :00:30.Live from London, that's our top story on Wednesday,

:00:31. > :00:41.In a growing rift between Brussels and Washington,

:00:42. > :00:46.the head of the European Council says the new US administration

:00:47. > :00:50.is "in the same category of threat as radical Islam".

:00:51. > :00:54.We assess the fallout and what this means for businesses on both sides.

:00:55. > :01:02.Seven is the magic number for Apple - the tech giant reverses its sales

:01:03. > :01:04.slump thanks to its latest iPhone reporting its highest

:01:05. > :01:07.And the markets in Europe navigate their way through the diplomatic

:01:08. > :01:11.spat and assess the latest earnings news from some of the worlds

:01:12. > :01:17.We'll talk you through the winners and the losers.

:01:18. > :01:20.Now, is a five-day working week essential to make it to the top?

:01:21. > :01:27.Later in the programme we'll be speaking to Bibi Hilton.

:01:28. > :01:34.She's a high-flying advertising boss who's just been named on this year's

:01:35. > :01:43.Computerised hedge funds have joined the ranks of the top performers

:01:44. > :01:48.We want to know would you trust your cash with man or a machine?

:01:49. > :02:03.Just put your cash in a tin under the bed! No, that's not my advice by

:02:04. > :02:05.the way. That's just what some people are doing with it at the

:02:06. > :02:07.moment! BP The US Army has been ordered

:02:08. > :02:09.to allow the construction of the final section

:02:10. > :02:12.of a controversial major oil It's a project supported

:02:13. > :02:18.by President Trump and that perhaps reflects his support for fossil

:02:19. > :02:20.fuels which is just one of a growing number of differences

:02:21. > :02:25.with the European Union. A growing transatlantic

:02:26. > :02:30.divide is emerging. The president of the European

:02:31. > :02:33.Council says the new government in Washington is one of the biggest

:02:34. > :02:35.threats facing Europe. In a letter to EU leaders

:02:36. > :02:38.Donald Tusk told them to "use the change in the trade strategy

:02:39. > :02:42.of the US to the EU's advantage" saying Washington's protectionist

:02:43. > :02:44.outlook was a chance to look Meanwhile President Trump's top

:02:45. > :02:51.trade adviser said Germany is using a "grossly undervalued"

:02:52. > :02:53.euro to "exploit" the US The claims were rejected by

:02:54. > :03:01.Germany's Chancellor Angela Merkel. The United States remains the single

:03:02. > :03:06.biggest economy in the world, it is worth more than

:03:07. > :03:10.$18 trillion in 2015. The European Union's is second

:03:11. > :03:19.and closing the gap. $16.3 trillion is the combined

:03:20. > :03:24.worth of it's 28 members. There also appear to be divides

:03:25. > :03:28.on immigration policy, energy, So can the world really afford

:03:29. > :03:32.for these two economic Paul Ivan is an analyst

:03:33. > :03:51.at the European Policy Centre Paul, are they going to fall out? It

:03:52. > :03:59.is looking seriously politically for the moment. It was quite surprising

:04:00. > :04:04.to see such a strong language, I saw the letter of President Tusk and it

:04:05. > :04:09.is a sign that things are pretty bad if we got to this point. From a

:04:10. > :04:15.trade point of view, I think we don't have yet the sort of decision

:04:16. > :04:19.that would seriously affect the trade relations, but the messages

:04:20. > :04:22.certainly don't look good at the moment. The American administration

:04:23. > :04:27.does have a point, doesn't it? Germany has done very well by being

:04:28. > :04:33.the strong unit surrounded by weak economies and making the most of the

:04:34. > :04:38.weak euro, over the decades really? Well, we all know that actually

:04:39. > :04:44.Germany doesn't really like the current policies of the ECB and has

:04:45. > :04:52.opposed the policies for a while. The ECB is an independent body. It

:04:53. > :04:56.is also I would say, this way of looking at the individual member

:04:57. > :05:02.states and let's sacred sizing individual member states and not

:05:03. > :05:06.looking at the whole union, at the whole eurozone is not really helpful

:05:07. > :05:11.in terms of by lateral relations. What about the trade deals that

:05:12. > :05:15.exist at the moment? TTIP which doesn't exist, but could exist.

:05:16. > :05:18.That's dead in the water, isn't it? If that's dead in the water, what

:05:19. > :05:23.are the chances of doing the deals elsewhere? Turning your back as it

:05:24. > :05:30.were on the United States? Well, certainly as the United States

:05:31. > :05:35.become more protectionist, the EU will be forced to making deals with

:05:36. > :05:40.other parts of the world. How easy is that going to be? Well, the EU

:05:41. > :05:44.would remain a very big economy. You just mentioned there are a lot of

:05:45. > :05:48.other countries in the world and big economy in the world which are

:05:49. > :05:53.interested in trading with the EU, to trade in better conditions and to

:05:54. > :06:00.trade more. I think the US is certainly going to miss this as it's

:06:01. > :06:04.pulling out even from treaties that it or treaties negotiated such as

:06:05. > :06:08.the TTIP. Thank you very much indeed.

:06:09. > :06:12.Now let's talk Apple. After three-quarters in a row

:06:13. > :06:14.of falling revenues, High demand for the iPhone 7 boosted

:06:15. > :06:19.the tech giant and it reported its highest

:06:20. > :06:25.ever quarterly revenues. In the last three months of the year

:06:26. > :06:28.the firm sold 78.3 million iPhones - Sales in China fell almost 12%

:06:29. > :06:43.to just over $16 billion. China has proved to be a difficult

:06:44. > :06:46.market with many homegrown rivals Dave Lee says that Apple

:06:47. > :06:58.was given a boost by strong They had a good holiday season,

:06:59. > :07:03.higher than expected actually and the move to remove the head phone

:07:04. > :07:06.jack from the iPhone proved to be a safe one despite many people being

:07:07. > :07:10.suspicious that was a good idea. That worked out well, but Apple are

:07:11. > :07:14.now saying for the rest of the year, don't expect huge sales in

:07:15. > :07:17.comparison because they think many people will be holding off for the

:07:18. > :07:21.next iPhone which isn't due until September. So it was a downbeat

:07:22. > :07:27.forecast for the rest of the year, but they will be pleased to reverse

:07:28. > :07:30.as you say, to reverse that trend of losing growth there across last

:07:31. > :07:37.year. So a good result for them today, but they are being quite

:07:38. > :07:55.tentative about the future. That was Dave Lee there.

:07:56. > :07:59.In India an important day. Our correspondent is in Delhi. It can

:08:00. > :08:04.tell us how it has affected the economy. Yes, I mean the Finance

:08:05. > :08:10.Minister here called it a disruptive reform. One which caused problems,

:08:11. > :08:16.but long-term benefits in a Budget speech that many people are calling

:08:17. > :08:21.largely populist, he a lot for rural areas, trying to fin jobs and

:08:22. > :08:26.boosting farmers' incomes and insurance and a lot on the

:08:27. > :08:31.agriculture sector, the State elections are coming up, but

:08:32. > :08:35.corporate India who I was watching the Budget with were disappointed.

:08:36. > :08:39.They expected tax to come down. Many here are fearing that while

:08:40. > :08:43.countries around the world are reducing the corporate tax, inviting

:08:44. > :08:48.more investors in, India has not shown signs of it and therefore,

:08:49. > :08:49.they worry that investment from India could actually flee abroad.

:08:50. > :09:03.OK, thank you very much. Let's look at markets across Asia.

:09:04. > :09:07.Hong Kong open today. It has been closed for a long weekend to

:09:08. > :09:11.celebrate the Chinese New Year. Mainland China, the markets are

:09:12. > :09:16.closed for this week. We saw upside for Japan which is interesting given

:09:17. > :09:20.the yen is strong versus the dollar. However, the dollar has stabilised

:09:21. > :09:25.in terms of its recent slide. Let's look at Europe. All headed

:09:26. > :09:29.upwards. As far as markets are concerned, globally, there is one

:09:30. > :09:31.story there and that's what's going to happen in Washington later today

:09:32. > :09:32.at the Federal Reserve. And Samira Hussain has

:09:33. > :09:41.the details about what's ahead The Federal Reserve ends its two day

:09:42. > :09:43.policy meeting on Wednesday and they are expected to leave interest rates

:09:44. > :09:48.as is. After all, this is their as is. After all, this is their

:09:49. > :09:52.first policy meeting since President Trump has taken office. The Fed is

:09:53. > :09:55.likely waiting for greater clarity on the president's economic

:09:56. > :09:59.policies. Social media giant Facebook will be reporting earnings

:10:00. > :10:03.and for the past few quarters Facebook's mobile ad sales have been

:10:04. > :10:07.soaring, boosting its overall growth, but back in November,

:10:08. > :10:13.Facebook warned that ad growth may slow. Also reporting earnings on

:10:14. > :10:17.Wednesday is Metlife, the largest life insurer in the US. Now, higher

:10:18. > :10:23.investment income will boost profits for the company. In fact, in 2017,

:10:24. > :10:28.Metleave and other life insurers are expected to see continued benefits

:10:29. > :10:29.from rising interest rates and lower corporate taxes under president

:10:30. > :10:53.Donald Trump's administration. Let's talk about the Federal

:10:54. > :10:57.Reserve. The State's interest rates are going up and Europe's are

:10:58. > :11:03.staying down. Well, that was its story and Janet Yelland is in the

:11:04. > :11:07.middle of the political debate because some are wondering if the

:11:08. > :11:11.new president will try and replace her, but she's there at the moment.

:11:12. > :11:15.The message coming out of the United States is hawkish. They have raised

:11:16. > :11:18.interest rates towards the end of last year and people are assuming

:11:19. > :11:20.that trend will continue this year. We will see another maybe

:11:21. > :11:24.three-quarter point increases in interest rates this year. The

:11:25. > :11:29.interesting thing, that's not set into a US context. That really sets

:11:30. > :11:33.the policy tone for the rest of the world. That doesn't mean to say that

:11:34. > :11:37.other central banks are going to follow, but the door has been opened

:11:38. > :11:42.and I think it's quite likely that the Bank of England for instance

:11:43. > :11:46.towards the end of this year maybe contemplating the first increase for

:11:47. > :11:50.a very, very long while and it's even possible that just with a

:11:51. > :11:53.little bit of a time lag that the European Central Bank will be moving

:11:54. > :11:56.in the same direction. Of course, we're all looking at the same sort

:11:57. > :11:59.of things and that's rising inflationary pressure. We've got the

:12:00. > :12:03.Bank of England meeting tomorrow. So we've got the Fed today, but also,

:12:04. > :12:07.you know, while the Central Bankers are meeting with their teams and

:12:08. > :12:10.making decisions on the cost of borrowing, all these companies are

:12:11. > :12:15.reporting their earnings. What picture are we getting? I think

:12:16. > :12:19.we're getting a reasonably positive picture out of companies and out of

:12:20. > :12:22.the so-called macrosignals at the moment and people are obviously

:12:23. > :12:26.worried for instance in the UK about the impact that Brexit will have,

:12:27. > :12:30.but the real economy has done far better than you were being told on

:12:31. > :12:33.your programme six months ago and the United States is picking up

:12:34. > :12:37.momentum at the moment. That's clear. It's going to grow faster

:12:38. > :12:40.this year than last year and even the European Union, it is an under

:12:41. > :12:45.achiever, but growth in the European Union is going to be a little bit

:12:46. > :12:49.faster in the coming year than it was last year. So a better

:12:50. > :12:53.background for companies and their reporting season will be, I think,

:12:54. > :13:00.quite reasonable. Richard, thank you very much.

:13:01. > :13:02.I managed to do that whole interview without talking about Trump. Did we?

:13:03. > :13:07.We didn't mention his name once! Is a five-day working week essential

:13:08. > :13:10.to make it to the top? Later in the programme we'll be

:13:11. > :13:14.speaking to Bibi Hilton. She's a high-fliyng advertising

:13:15. > :13:18.boss who has just been named on this year's

:13:19. > :13:19.Part Time Power list. You're with Business

:13:20. > :13:27.Live from BBC News. It's all change at the top

:13:28. > :13:31.of telecoms giant Talk Talk. Dido Harding is stepping down

:13:32. > :13:35.after seven years in the job. She's being replaced

:13:36. > :13:37.by Charles Dunstan who founded the business and will become

:13:38. > :13:41.Executive chairman. Theo Leggett is in

:13:42. > :13:52.the Business newsroom. Let's have analysis of what Dido has

:13:53. > :13:56.achieved? Well, she has been in the post for seven years, Jamie. For a

:13:57. > :14:01.lot of that time she was seen as a solid leader for the company. A safe

:14:02. > :14:05.pair of hands, but there was one tremendous blot on her record which

:14:06. > :14:10.I'm sure you can remember. That was in October 2015 when the company had

:14:11. > :14:16.to admit that it had been the victim of a massive data breach. Initially

:14:17. > :14:19.it thought four million customers might have had their information

:14:20. > :14:23.stolen, but the figure was lower, it was about 160,000 customers. Some of

:14:24. > :14:29.whom lost financial information as well. Now, the company has recovered

:14:30. > :14:33.from that reasonably well. Its revenues have remained strong, but

:14:34. > :14:37.that was a tremendous blow to customer confidence and it was also

:14:38. > :14:41.a very big blow to the reputation of Dido Harding because it happened on

:14:42. > :14:44.her watch and at the time executives at TalkTalk didn't know their

:14:45. > :14:48.systems were vulnerable and didn't know that the information had gone

:14:49. > :14:57.missing. So what do we know about the new team that's taking over in

:14:58. > :15:04.May? Well, there is Tristia Harrison. And Sir Charles done ston

:15:05. > :15:07.it was the founder of TalkTalk. He founded Carphone Warehouse and he

:15:08. > :15:10.will come in as executive chairman so he will be a guiding pair of

:15:11. > :15:15.hands for the business if you like and as a result of that, he's going

:15:16. > :15:20.to be stepping down from a similar role at Dixon's Car Phone. Investors

:15:21. > :15:28.at TalkTalk seem to be welcoming it. TalkTalk's shares were sharply up

:15:29. > :15:33.this morning. Thanks a lot, Theo. Dido Harding was a guest on Business

:15:34. > :15:38.Live not long ago. Cross-country commuters to save

:15:39. > :15:45.hundreds of pounds. This is dear to my heart, the hours I spend online

:15:46. > :15:48.trying to bring down the price of a trip of a cross-country trip when

:15:49. > :15:51.you're trying to do singles and returns, they're going to bundle

:15:52. > :15:53.them together and reduce the price which looks like it's a good idea.

:15:54. > :16:01.Well, it's a good idea for me! Our top story: The new US

:16:02. > :16:07.administration poses the same category of threat

:16:08. > :16:12.to the European Union That's the startling claim

:16:13. > :16:16.made by the President Meanwhile, Donald Trump is pushing

:16:17. > :16:21.ahead with his plans to build a controversial new oil pipeline

:16:22. > :16:24.in North Dakota. The US President has previously

:16:25. > :16:27.voiced his support for the country's fossil fuel industry amid criticism

:16:28. > :16:29.from international There is a lot going on when it

:16:30. > :16:43.comes to Mr Trump. Let's move on. Working part time is something that

:16:44. > :16:46.has traditionally been First, the part-time world

:16:47. > :16:51.is expanding fast and, second, it's reaching the upper levels

:16:52. > :16:53.of management in some Not surprisingly it's

:16:54. > :16:57.been driven by women, many of them returning to work

:16:58. > :17:00.after having had children. So, across the European Union,

:17:01. > :17:02.in 2015 only 9% of working-aged That compares with almost

:17:03. > :17:07.a third of all women. In the United States,

:17:08. > :17:09.more people generally work Including almost 36%

:17:10. > :17:16.of working age men. And the equivalent figure

:17:17. > :17:22.for women is just over 64%. Our next guest knows a thing or two

:17:23. > :17:28.about the benefits and challenges She's Bibi Hilton, Managing Director

:17:29. > :17:32.of media agency Golin. She's on this year's Power Part Time

:17:33. > :17:51.list that celebrates the UK's most Welcome. Thank you. You start. Tell

:17:52. > :17:55.us your story. You either managing director of a very successful

:17:56. > :17:59.advertising agency based in London. You did not start out part-time, but

:18:00. > :18:04.you are now part-time. Explain how you got to hear and wide. I was

:18:05. > :18:09.promoted to the managing director wrote about two years ago on

:18:10. > :18:13.maternity leave. When I returned I wanted to make sure I kept that

:18:14. > :18:19.balance in my new role as a mother and my new role as an MD and I moved

:18:20. > :18:24.to working four day weeks, so I do not work on Friday. You got to that

:18:25. > :18:30.level working full-time. Could you get further working full-time? You

:18:31. > :18:36.get off the promotion ladder and you stay there because you are not in

:18:37. > :18:41.the group for promotion. In our business that is something we are

:18:42. > :18:45.trying to change. It comes down to job design. We are working hard to

:18:46. > :18:50.make sure that flexibility is part of the roles that we create. Two

:18:51. > :18:55.thirds of our leadership team, some of which are men, all work flexibly

:18:56. > :19:01.as well. In a company like yours, small and nimble, your staff is very

:19:02. > :19:07.important. You want to retain really good staff because they are the ones

:19:08. > :19:12.who bring in the client and revenue. I can understand why as a company

:19:13. > :19:16.that would be important. Is it a cultural thing you are generating

:19:17. > :19:23.that is not seen elsewhere? That is the problem. We are people centric

:19:24. > :19:28.business. Is important. The flexibility and the desire of people

:19:29. > :19:32.to work more flexibly is a growing trend. Businesses in any sector will

:19:33. > :19:40.need to make those cultural changes to adapt. I do not think it will go

:19:41. > :19:44.away. Is it a luxury or is it good for business? That has been

:19:45. > :19:49.criticism in the past, that it is apparent. But we have put this at

:19:50. > :19:53.the heart of our culture and we have seen benefits. We have seen

:19:54. > :20:01.retention go up. Keeping the staff there. We have seen more people

:20:02. > :20:05.actively coming to want to work for us, and it has helped keep our

:20:06. > :20:09.recruitment costs down. If you are the only people doing it, you stay

:20:10. > :20:15.in that job because you realise you cannot go anywhere else to get that

:20:16. > :20:19.perk, if it is a perk. It is not a perk, it is a different way of

:20:20. > :20:24.working and it is reflective of the changing nature of the workplace.

:20:25. > :20:29.What we have tried to do is change our culture and change the way we

:20:30. > :20:34.structure our teams, the way we manage resources to counteract that.

:20:35. > :20:40.I work part-time, you work part-time, so we are all part here,

:20:41. > :20:44.but you do not work on the days you are not at work and that is very

:20:45. > :20:48.important. How do you do that as the managing director of a big company

:20:49. > :20:54.based in London with a lot of staff? Are you not tempted to get on your

:20:55. > :20:57.phone on a Friday and have the odd conference call. You have to be

:20:58. > :21:03.really disciplined and I work hard to be disciplined. I want to have

:21:04. > :21:07.that day with my daughter, it is important for me. Because 10% of my

:21:08. > :21:11.team work flexibly I want to set a good example and I want them to know

:21:12. > :21:18.that when they do not work they are not expected to reply to e-mail. We

:21:19. > :21:19.work hard to respect that time off. Shall we move on? You start this

:21:20. > :21:22.time. Saudi Arabia's Oil minister has told

:21:23. > :21:24.the BBC that supply and demand could balance out as early

:21:25. > :21:27.as July this year. He said it would happen

:21:28. > :21:29.because of the historic agremment that members of the OPEC oil

:21:30. > :21:31.producers cartel stuck with non-members at

:21:32. > :21:33.the end of last year. That deal was aimed

:21:34. > :21:36.at increasing the price of oil. Khalid al-Falih was speaking

:21:37. > :21:51.to our Chief International Saudi Arabia has always produced in

:21:52. > :21:56.these parts to market demand. In the last two years our marketing

:21:57. > :22:08.strategy is to sell to long-term customers who request shipments for

:22:09. > :22:15.the next month to be scheduled. So, come July our assumption markets

:22:16. > :22:24.will be balanced. The agreement at that time is to seize the ceilings

:22:25. > :22:25.that will be lifted and Saudi Arabia will be responsive rather than

:22:26. > :22:29.What other business stories has the media been

:22:30. > :22:32.Richard Jeffrey, chief economist at the investment firm

:22:33. > :22:38.Cazenove Capital Management is joining us again to discuss.

:22:39. > :22:51.Man and machine. It is about the computer is taking over the world.

:22:52. > :22:56.This is the list of the top 20. Are you surprised to hear this? There

:22:57. > :23:00.are certain markets which favoured different styles of investment. Over

:23:01. > :23:06.the last year it has been quite difficult to be active because the

:23:07. > :23:12.market has done quite unpredictable things. It reacted very

:23:13. > :23:17.unpredictably in the way people did not expect after the Brexit vote. It

:23:18. > :23:22.reacted after the presidential election and that makes it difficult

:23:23. > :23:26.for managers. The computer driven software which runs some of these

:23:27. > :23:32.funds, so-called algorithms, were slightly more successful. You could

:23:33. > :23:44.just follow the FTSE? You would not need an algorithm? They have always

:23:45. > :23:50.outperformed? The markets tend to underperform the indices because of

:23:51. > :23:53.costs. Algorithms give you a steady performance, but there are certain

:23:54. > :24:00.market environment in which they will underachieve and they will

:24:01. > :24:04.underachieve the best fund managers who have an active view and to

:24:05. > :24:07.anticipate future movements rather than the second to second movements

:24:08. > :24:12.they are thinking about a few months ahead. We asked you at the beginning

:24:13. > :24:19.of the programme do you trust a man or a machine with your money in the

:24:20. > :24:25.light of that story. Rees is saying market machines have an upper hand

:24:26. > :24:30.in stable arenas. You are saying in the markets we have had in the last

:24:31. > :24:35.few months perhaps the machine had the upper hand. I think it did. It

:24:36. > :24:39.is because markets were so unpredictable because their

:24:40. > :24:43.behaviour was difficult to anticipate. Ian says robots are not

:24:44. > :24:47.likely to come back from the pub drunk in the afternoon. Another one,

:24:48. > :24:53.the machine is the man's slave and my money goes to the man definitely.

:24:54. > :24:57.Personally I feel the same way because I want to know that somebody

:24:58. > :25:03.is thinking about the investment decisions on my behalf. It is

:25:04. > :25:09.generally men who caused most of the financial collapses over the last

:25:10. > :25:13.four handed years, isn't it? Not machines. There is always a good

:25:14. > :25:21.woman behind a man! There's talk about card, will bear robots soon be

:25:22. > :25:24.picking your shopping? Possibly in the future replacing thousands of

:25:25. > :25:32.staff who currently pick the fruit and veg and pack it away and then it

:25:33. > :25:37.goes on to the delivery van. You have said it is a threat to jobs. I

:25:38. > :25:41.am told that when the wheel was invented that the climate then was

:25:42. > :25:46.that would be a massive effect two jobs because, we have been carrying

:25:47. > :25:50.things and now we do not have to. I do not think it will affect jobs. I

:25:51. > :25:55.think some of the more menial activities will disappear, but there

:25:56. > :26:00.will be more value added jobs. Let's hope you are right. That is all we

:26:01. > :26:04.have got time for today. Had you for your company.

:26:05. > :26:12.I am back tomorrow. And so am I. See you then.

:26:13. > :26:19.A windy end to the week, potentially stormy on Friday because of deep

:26:20. > :26:21.areas of low pressure moving in of the