27/03/2017 BBC Business Live


27/03/2017

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This is Business Live from BBC News with Ben Thompson and Sally Bundock.

:00:08.:00:10.

Major producers consider another plan to boost prices.

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Live from London, that's our top story on Monday 27th March.

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Swollen stockpiles are depressing oil prices but what can Opec

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and non-Opec members do now and what did they discuss

:00:39.:00:41.

We will tell you all you need to know.

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A record fine for BT with the firm setting aside hundreds of millions

:00:47.:00:49.

of dollars for delays in installing high-speed lines.

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This is how the European markets are looking. It's a big week for pound

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as divorce proceedings with the EU are kicked off in London.

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And we'll be getting the inside track on how demand

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for luxury goods from Britain is being turned into an upmarket

:01:13.:01:15.

In the wake of the story that two girls have been grounded

:01:16.:01:23.

by United Airlines for wearing leggings we want to know has

:01:24.:01:25.

Or is it reasonable for an employer to dictate the dress code

:01:26.:01:29.

Let us know using the hashtag BBCBizLive.

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Lower oil prices might be good for consumers -

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it keeps energy prices down as well as transport and

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But it's not good for oil producing nations.

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And this weekend, many of them met to discuss what they can

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When supply falls, prices tend to rise.

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Oil prices rose sharply when producers agreed to cut

:02:13.:02:15.

production in November - and whilst prices held up

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for a while there's been a drop of around 10% in the last few weeks.

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And that can have a huge impact of the economies of oil

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Many rely on the money it brings in to fund government spending.

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The biggest OPEC producer, Saudi Arabia, wants $60 per barrel.

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Well, there's been an increase in global reserves of oil.

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The US is the world's biggest consumer and last week it's

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The US is the world's biggest consumer and last week its

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stockpiles of crude oil hit 533 millionbarrels.

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There's also renewed pressure from US shale oil producers

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As you can see here the number of active US rigs drilling for oil

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Iain Armstrong is an Oil and Gas Analyst at the wealth

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Good to see you. Give us more detail about what we have learned from the

:03:16.:03:26.

weekend's meetings. What we have learned is that they still need more

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clarification on the accuracy of the numbers coming through. With regards

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to the Opec numbers, we know in February Opec has done a good job in

:03:38.:03:41.

terms of compliance but the non-Opec members of the 21 who signed up

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haven't done, they're only 64% compliant. So they've got to do

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something better before something can be changed with regards to the,

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either extending the agreement, or actually as even suggested maybe

:03:59.:04:02.

increasing the production cut. What do you think is likely to happen?

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They'll meet fully in May, obviously this current deal that they agreed

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in November is in place until June. Is it more than likely they'll

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extend the period of time for the production cuts they've in place at

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the moment? It's going to depend on a few things. One of the most

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important things is the rate of demand, increase in demand. We are

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now getting into the main demand season, particularly in the US. As

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Ben pointed out, there's been a large increase in the crude oil

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inventories. The other side of that coin, though, is there's been a

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sharp fall in the level of distilate for diesel and gasoline inventories,

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so going into the driving season it's slightly, it's more complicated

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than the crude numbers would suggest and if we do have a decent driving

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season then the level at least of the US inventories will drop. If you

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can take that across the globe, then hopefully also the level of global

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inventories will drop, probably by the third quarter and that's what

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the Oman Minister was saying. I agree with him. That's why I think

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when we come to May they'll probably say let's do it for nor six months.

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Also, something that has shifted that Ben pointed out is the increase

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in production in the US in terms of Shea production. That's something

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that Saudi Arabia has been watching very closely -- shale. It's

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something they hoped may not be such a big threat in terms of a threat to

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their income in terms of the price of oil. Again it's more complicated

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than just it looks like the numbers, the increase in the rigs is a good

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start, but you have what is called drilled but uncompleted, and there

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is a lot of those rigs, without getting into too much detail, but

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you buy a lease in the States. If you don't drill on that lease you

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will lose that lease. What you do is you drill on that leez just to make

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sure that you deep the lease. So a lot of the number that's been

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reported is not necessarily going to turn into production. There will be

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higher production this year and definitely in 2018. But it's not as

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clear-cut as the rig count would suggest. All right, thank you for

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your time. As ever, the devil is in the detail on this. We will try to

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keep you up to date with any developments that will affect the

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price of oil. It's worth saying US light crude is $47. 5 a barrel.

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Brent is 50, just shy of 50. They're both down. Worth keeping an eye Back

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On Top -- on worth keeping an eye on what happens as a result of that

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meeting. Delays in installing internet

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connections are expected to end up costing the UK telecoms firm BT

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more than $420m. The company installs wholesale

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services for rivals and most of the payments will be

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compensation to them. The regulator Ofen has also issued

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a $52m fine which it says Tens of thousands of people in Chile

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have taken part in demonstrations calling for the government to scrap

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the country's controversial Critics say it benefits

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the administrators and the wealthy but leaves poorer Chileans

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with a final pension There is more to read about in terms

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of business stories on our website. BT shares are falling today in

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London. A few companies are falling in London on the FTSE 100, we will

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talk about that. Before we head to Asia, a story here discussing MTR,

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it's been awarded the franchise for Crossrail, the trans-London line. It

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has also been awarded the south-west trains franchise F you are watching

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outside the UK you may not know that there's so much debate about who

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runs trains in this country. Lots of delays and strikes and lots of

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problems of late on a number of different franchises. Quite a

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significant moment. MTR runs the Hong Kong Metro. And we are going to

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head there now. The first woman elected as leader

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of Hong Kong has vowed to heal divisions amid demands for more

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democracy and protests at mainland Carrie Lam had the backing

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of the Chinese government But what do businesses

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make of the territory's Bring us up to date because it's

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interesting when you talk about what business there wants and what they

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want in the territory, have they got the right woman? Well, they

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certainly think so, even before yesterday's vote we had a number of

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tycoons here in Hong Kong coming out publicly in support of Carrie Lam,

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she was selected by a economy of 1200 people, less than 1200 and many

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she won such strong support it's she won such strong support it's

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clear the business community supports her. There are issues,

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though. The issue is that over the last few years she has become a

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polarising person, a politically divisive person. She was the one in

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charge of pushing through a political reform package that was

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unpopular and eventually led to the 2014 protests which paralysed the

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city for weeks. Now she is the chief executive-elect we are expecting

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more protests. At least one political party has said they intend

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to start another civil disobedience movement in July when she takes

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office. We will keep a close eye to see what difference that makes,

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thank you very much. Let's stay in the region there.

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Toshiba's loss-hit US nuclear unit could be placed under bankruptcy

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protection as early as this week, a report said Monday,

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The company has now lost more than half its market value

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since late December, when it warned of

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multi-billion-dollar losses at Westinghouse and said

:10:25.:10:26.

it was investigating claims of accounting fraud by senior

:10:27.:10:28.

In the US, the decline in US stocks last week was the biggest one week

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decline since the US election, some say it reflects

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concern that the optimism about President Trump's promises

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It's a big week for the pound as the UK government prepares

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to start the divorce proceedings against the EU.

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It fires the starting gun on the process by triggering

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This could well prompt some sterling weakness in the short-term.

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More on that in a moment, but first to the US and the day

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This is the last week of March and what will dominate is manufacturing

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data and consumer surveys. What will be most closely watched is consumer

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spending numbers which come out on Friday. Two-thirds of the US economy

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depends on consumer spending so this is an important number to keep in

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mind. In January, consumer spending was up 0. 0.2% and investors are

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expecting a similar gain for February. On Wednesday, the

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congressional budget office will release its analysis of the

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budgetary changes to spending programmes and the tax code proposed

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in the President's budget and on Friday, BlackBerry will be reporting

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earnings. The company is moving away from smartphone hardware to

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concentrate on software and analysts will be looking to see if it will

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pay off. Trevor Greetham is with us

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from Royal London Asset Management. Good to see you, how are you? Very

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well. How are you? Very well. Now you have been scribbling notes ever

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since you arrived, writing on that little piece of paper, it's going to

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be another very interesting week for markets. We saw a shift last week in

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terms of sentiment on global markets and you feel it's carrying on. Yes,

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this is the first period of turbulence really we have seen in

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about a year. If you think about the stock markets, they've risen very

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broadly over the last 12 months. Sailed through Brexit, they sailed

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through Trump's election victory. Both of these things meant more

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stimulus from central banks. Now they're at the point where growth is

:12:41.:12:46.

strong and prices are quite high, and the concern is if Trump can't

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get Obamacare repealed, how can he get tax reform or further stimulus

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through? The markets are starting to say maybe we get Trump without the

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good bits. It was late on Friday when it unravelled. The Obamacare

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issue, I mean. Most of the markets were closed, they're following

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through today. I think the real question is is there enough growth

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in the world to keep stock prices rising and enough stimulus to keep

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them rising? It's interesting to hear about the oil price staying low

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at the moment because you are likely to see inflation fall in the second

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half of the year, if the oil price stays where it is. That will mean

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central banks will feel it's OK to keep the juice flowing for longer.

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It's fairly positive, but there is some turbulence. And turbulence

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could come on Wednesday. We begin officially the divorce proceedings,

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Article 50 is triggered we are told on Wednesday. Again it's a same sort

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of debate, nothing changes particularly in the short-term. But

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we start to get an idea of the longer-term, is that the point? I

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don't know if even we will get the longer-term, the markets know about

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Article 50 by now very well. They know about the triggering of it this

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week. What may be new news is hard to predict is the kind of

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relationship and the way the negotiations start. I think there

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are lots of reasons to think there will be periods of turbulence again

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in the currency markets over the next few months, particularly with

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this focus on the so-called divorce bill which the Europeans want us to

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sort out upfront. So watch out for the stock markets wobbling in the

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near term and watch out for potential downside on the pound.

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There will be more scribbling for to you do on Wednesday. Thank you very

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much. We'll be getting

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the inside track on how British afternoon tea has become part

:14:45.:14:47.

of an up-market hotel You're with Business

:14:48.:14:49.

Live from BBC News. BT has been fined ?42

:14:50.:15:09.

million by the telecoms regulator Ofcom for delays

:15:10.:15:15.

in installing high-speed lines. It is the largest fine

:15:16.:15:21.

the regulator has ever imposed. It comes after BT's Openreach

:15:22.:15:24.

division cut how much it paid telecoms providers for delays

:15:25.:15:27.

in installing lines Joining us now is Gaucho Rasmussen,

:15:28.:15:28.

Director of Investigations Thank you for being on the

:15:29.:15:45.

programme. Good morning. This is the biggest fine to be handed out so

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far. Tell us what BT has been doing? Well, this is the biggest fine

:15:51.:15:53.

because it relates to a very important part of the UK economy.

:15:54.:15:57.

This is the backbone of our digital network. BT was found to have

:15:58.:16:04.

breached this contract with some of its customers and other telecoms

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providers and other providers such as Vodafone and TalkTalk by the way

:16:11.:16:14.

it rolled out the broadband lines. They should have given appropriate

:16:15.:16:18.

notice in a reasonable time frame so people knew when the lines would be

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rolled out so if there is any delay and if there is delay BT maybe

:16:23.:16:28.

obliged to pay compensation. We have found that BT did not pay the

:16:29.:16:31.

appropriate amount of compensation because of the breach it engaged in.

:16:32.:16:36.

Clearly, we know that Openreach will be split off from BT, it creates a

:16:37.:16:42.

new legal entity and one that many of the competitors have welcomed.

:16:43.:16:45.

How significant is this in light of that? I would say the investigation

:16:46.:16:51.

relates to historic conducts and so that was then and Openreach

:16:52.:16:56.

arrangements where BT basically have met all our requirements in full is

:16:57.:17:01.

a forward looking change that we think will proindividual a robust

:17:02.:17:05.

and independent Openreach to serve all its customers well. OK, it is

:17:06.:17:16.

good to talk to you. Thank you. The ?42 million fine imposed on BT.

:17:17.:17:22.

BT has changed. It says we have put our problems in order. Adding there

:17:23.:17:27.

has been real and tangible change at BT.

:17:28.:17:32.

BT shares are down 2% in London. No surprise.

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Our top story, major oil producers are considering

:17:50.:17:54.

A quick look at how markets are faring.

:17:55.:18:05.

Not a good start to a brand-new trading week. London bearing the

:18:06.:18:11.

brunt. Many mining stocks are down. Energy stocks are down. BT is down.

:18:12.:18:18.

Not much headed upwards. The gold price is. People are coming ot of

:18:19.:18:21.

anything risky and going into anything safe. Have you been

:18:22.:18:24.

shopping this weekend? Is that why? No. I have not boosted the price of

:18:25.:18:30.

gold on my own. I wish I had that power!

:18:31.:18:33.

Now let's get the inside track on the growing demand

:18:34.:18:36.

for quintessentially British luxury from the rest of the world.

:18:37.:18:40.

It is something our next guest is hoping will help her hotel stand

:18:41.:18:43.

The Middle Eastern state is one of the seven United Arab Emirates

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which have become one of the region's most important

:18:51.:18:54.

Dubai Department of Tourism says more 14 million

:18:55.:18:57.

visitors come to its shores every year.

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On average each visitor spends $140 a night on accommodation.

:19:05.:19:09.

Out of Dubai's 681 hotels 96 are five

:19:10.:19:10.

stars and have an average occupancy of 77%.

:19:11.:19:17.

I'm joined by Debrah Dhugga, Managing Director

:19:18.:19:19.

Welcome to the programme. So you are moving what is the Dukes Hotel,

:19:20.:19:34.

you're replicating the Duke's Hotel in London, it is a very British

:19:35.:19:38.

established iconic brand to Dubai. Why Dubai? That's correct. Duke's,

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London, 116 years old so a lot of history to it and the locals, the

:19:46.:19:51.

UAE market actually adore anything British. So in Dubai there is a lot

:19:52.:19:56.

of glitz and glam and a lot of great hotels. A lot of stunning hotels,

:19:57.:20:02.

but there is nothing quintessentially British. We were

:20:03.:20:06.

looking to take and expand our company with Duke's brand and we

:20:07.:20:12.

looked about where we would go, where isn't there that

:20:13.:20:15.

quintessentialle British market and Dubai is one of them. We talked

:20:16.:20:18.

about occupancy rate. It is interesting if you go to Dubai, I

:20:19.:20:22.

know Dubai well having been the correspondent there. There is so

:20:23.:20:26.

many hotels, you can't move for hotels and they have got an

:20:27.:20:31.

ambitious target to build more. Your competition is changing by the day.

:20:32.:20:35.

New hotels are open, more occupancy, how do you get people in these

:20:36.:20:38.

rooms? How are you going to fill the rooms? Dubai Tourism do a great job

:20:39.:20:45.

in really promoting Dubai as a destination and they continue to do

:20:46.:20:49.

that. There is a lot of money invested into Dubai itself. We have

:20:50.:20:54.

just had the new parks open which is great attractions. So it's

:20:55.:20:57.

constantly growing. There is constantly something new happening

:20:58.:21:03.

in Dubai. So someone who visited Dubai five years ago, they would go

:21:04.:21:06.

there and say wow, look at the changes. Great changes. There is

:21:07.:21:10.

always something happening. It is not a destination people tend to go

:21:11.:21:13.

once, and if they go back there is something new for them to

:21:14.:21:16.

experience. Who are you hoping will walk through the doors of your

:21:17.:21:20.

hotel? You're not looking for the British tourist, Rupert Murdoch's I

:21:21.:21:24.

assume, or are you? Or are you looking for the more local tourist

:21:25.:21:27.

because you're selling that kind of British experience as it were? It

:21:28.:21:30.

will be both. We will have a big following from the Brit market. I

:21:31.:21:34.

mean the UK is one of the biggest feeding markets into Dubai itself as

:21:35.:21:41.

a holiday destination. Followed by closely by the Asian sector, and

:21:42.:21:46.

Germany. So absolutely, we will have a big UK market. There will be a big

:21:47.:21:50.

British audience going into the hotel. But as well, the local

:21:51.:21:56.

market, local market come to the UK to experience a traditional

:21:57.:21:59.

afternoon tea. Anything British, you know, fish and chips, anything that

:22:00.:22:03.

sort of is just going back to our roots. Bangers and mash? Absolutely.

:22:04.:22:07.

Those are the some of things that are offered on our menu. It is all

:22:08.:22:11.

about offering that greater British experience. So those are the people

:22:12.:22:14.

who will stay in itment talk us through who is going to work in it.

:22:15.:22:20.

In Dubai most of the hospitality industry is made up of ex-pat

:22:21.:22:24.

workers or parts of Asia or indeed from the UK and Europe. What mix do

:22:25.:22:30.

you have? I know you're passionate about getting yng people into the

:22:31.:22:33.

industry? With regards to the recruitment drive. We started our

:22:34.:22:36.

recruitment drive about 18 months ago which is out of the norm when

:22:37.:22:41.

you're opening a hotel. Wanted to bring fresh energy and new blood

:22:42.:22:45.

into Dubai rather than just bringing people from other hotels. That

:22:46.:22:47.

British experience is really important. So we have taken people

:22:48.:22:52.

over from London who are actually, who know that British experience,

:22:53.:22:56.

our executive head chef is from Manchester for example. So he has

:22:57.:23:00.

worked around the world, but we've brought him back. One of our head

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chefs who is running one of our destination restaurants, has come

:23:07.:23:11.

over from Ireland. So we've got a great mix of nationalities within

:23:12.:23:14.

the hotel. Deborah, we appreciate your time,

:23:15.:23:19.

thank you for coming in. Thank you for having me. Thank you very much.

:23:20.:23:26.

There are predictions that many jobs carried out by humans will be taken

:23:27.:23:33.

by robots. A glimpse of the future is on show in San Francisco where a

:23:34.:23:37.

robot is turning heads and coffee cups!

:23:38.:23:59.

With Cafex we tried to create a product that would allow people to

:24:00.:24:08.

get speciality coffee consistently and do that every day.

:24:09.:24:21.

You're not a robot. Once again encrypted messages and in this case

:24:22.:25:13.

whatsapp because of what happened in Westminster and the man who was the

:25:14.:25:19.

perpetrator on whatsapp before? Boris Johnson and am burd Rudd said

:25:20.:25:24.

the Security Services couldn't get access to the messages on the

:25:25.:25:32.

attacker's phone because of whatsapp and whatsapp is encrypted end to

:25:33.:25:39.

end. You remember the fight that Apple had with the American

:25:40.:25:43.

authorities about the unlocking of an iPhone which went on for months

:25:44.:25:47.

and months. This one will run and run. These Silicon Valley companies

:25:48.:25:52.

are under attack for encryption. More online. We will see you later.

:25:53.:25:54.

Bye-bye. Good morning.

:25:55.:26:11.

What a lovely weekend it was. Most parts of the

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