28/03/2017 BBC Business Live


28/03/2017

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

:00:00.:00:12.

As Britain gets set to pull the trigger on Brexit

:00:13.:00:14.

what different has the referendum result really made to the economy?

:00:15.:00:17.

Live from London, that's our top story

:00:18.:00:19.

Greater prosperity inside the European single market was one

:00:20.:00:39.

of the dominant arguments of remainers - were they right?

:00:40.:00:42.

Or will the Brexiteers sums add up for Theresa May?

:00:43.:00:46.

Also in the programme: Making it's China ambitions plain.

:00:47.:00:48.

American Airlines teams up with China Southern to gain

:00:49.:00:51.

a foothold in one of the world's most competitve markets.

:00:52.:00:58.

And the European trading day gets off to a positive start -

:00:59.:01:00.

but could there be a cabinet reshuffle in South Africa today?

:01:01.:01:03.

We'll make sure you're across the key market moving stories.

:01:04.:01:08.

And when it comes to your health - what price would you pay

:01:09.:01:11.

We meet the firm that says it can tailormake your healthcare plan -

:01:12.:01:16.

and guide you through the confusing - and expensive - world

:01:17.:01:19.

And as confectionery giant Mars says its Maltesers,

:01:20.:01:27.

M and Minstrels packs are to shrink by 15%

:01:28.:01:30.

We want to know - do you prefer higher prices or smaller packs?

:01:31.:01:41.

Let us know, use the hashtag BBCBizLive.

:01:42.:01:43.

Get in touch. I'm sure you have a view.

:01:44.:01:56.

On Wednesday, Theresa May triggers Article 50,

:01:57.:02:03.

and the UK will start two years of Brexit negotiations

:02:04.:02:06.

So just how is Britain's economy doing - and have any

:02:07.:02:17.

of the predictions of doom and gloom come to pass?

:02:18.:02:23.

The UK economy grew by more than previously reported

:02:24.:02:25.

The value of goods and services produced in the UK -

:02:26.:02:30.

or Gross Domestic Product - was up by 0.7% - from 0.6% -

:02:31.:02:33.

according to the Office for National Statistics.

:02:34.:02:37.

The pound fell sharply after the Brexit vote,

:02:38.:02:42.

and has since been trading around 15% lower compared to the dollar

:02:43.:02:45.

The weaker pound has helped exporters and

:02:46.:02:57.

the tourism industry - but it's hit

:02:58.:02:59.

The FTSE 100 has risen 16% since the eve

:03:00.:03:05.

But the weak pound could be helping: big companies' profits are often

:03:06.:03:13.

international and calculated in dollars - and they automatically

:03:14.:03:16.

rise when converted back into sterling.

:03:17.:03:23.

After the referendum, the Bank of England boosted

:03:24.:03:27.

the economy by cutting interest rates from 0.5% to 0.25% last

:03:28.:03:30.

August - taking UK rates to a new record low.

:03:31.:03:35.

The unemployment rate has been falling and is currently

:03:36.:03:42.

around 1.6 million people - the lowest jobless rate since 2005.

:03:43.:03:46.

Meanwhile, in the three months to January, wages grew by 2.3%,

:03:47.:03:49.

compared with the same period a year earlier.

:03:50.:03:53.

He's the Europe associate at the political risk

:03:54.:03:56.

Salary running to the details and it appears from an economic perspective

:03:57.:04:08.

the UK is approaching these negotiations from a sound financial

:04:09.:04:13.

footing -- salary running. Yes, the public deficit is still quite large,

:04:14.:04:18.

but certainly I think it has impressed most observers and

:04:19.:04:22.

surprised them in how it has performed, talking about the UK

:04:23.:04:26.

economy, the growth outlook is still quite good and investment is still

:04:27.:04:32.

all right. Inflation is above 2% target and hasn't quite gone crazy.

:04:33.:04:37.

Overall the UK's economy is quite strong, but the question is whether

:04:38.:04:40.

the investment outlook remains the same and over the next two years,

:04:41.:04:46.

all the people that were interested in the UK for investing will be very

:04:47.:04:50.

interested in the deal that we get with our European partners, our

:04:51.:04:55.

biggest market, and the UK has been seen as a investing destination

:04:56.:05:03.

because it was inside the single market, but what about when it is

:05:04.:05:08.

outside? The first issue that you raise, the economy looks OK, but

:05:09.:05:11.

critics will say it looks fine because nothing has yet changed.

:05:12.:05:16.

This is the preamble, but triggering Article 50 is when it really starts.

:05:17.:05:22.

Absolutely. The uncertainty is key, but these two years, and you have to

:05:23.:05:26.

look at how it works, Article 50, and for the past eight months the UK

:05:27.:05:30.

has defined the timing so we know that we will be leaving at some

:05:31.:05:33.

point but the Prime Minister has been able to decide when she

:05:34.:05:36.

triggers Article 50 and what she says before and what the objectives

:05:37.:05:40.

are that she sets out and what business leaders she is able to

:05:41.:05:44.

reassure, but when we hand over power to Brussels to negotiate we

:05:45.:05:48.

will have less control and I think that will be quite soon, within 48

:05:49.:05:53.

hours the European institutions will publish a timeline of what will

:05:54.:05:57.

happen and it will be quite clear that we won't be negotiating our

:05:58.:06:00.

economic relationship first. That will come second, and that is not

:06:01.:06:05.

entirely reassuring to investors. What deal will we get? The question

:06:06.:06:11.

is always whether this is in the interests of the European Union to

:06:12.:06:14.

offer us a good deal, because that might set the ball rolling on other

:06:15.:06:18.

countries wanting to leave, but they won't want to penalise us because we

:06:19.:06:24.

are a trading partner, and working up the balance will be the toughest

:06:25.:06:29.

bit. Absolutely, the UK is seen as a very important economic partner and

:06:30.:06:34.

some countries want the relationship to remain positive. However they

:06:35.:06:41.

will want to maintain the internal logic of how the EU works and that

:06:42.:06:47.

will mean the UK can have favourable access terms as it does currently,

:06:48.:06:54.

which thinks, you can imagine a relationship without Harris, but on

:06:55.:06:59.

nontariff barriers including regulation and services markets it

:07:00.:07:02.

will look much more complex than it does -- you can imagine a

:07:03.:07:07.

relationship without tariffs. Getting all this done in two years

:07:08.:07:11.

will be very difficult. I imagine we will talk about this again. Thanks

:07:12.:07:13.

for joining us. The London mayor has been talking

:07:14.:07:21.

this morning and he said it would be a major mistake if the EU tries to

:07:22.:07:28.

punish the UK for Brexit. He is calling on the EU to rise above the

:07:29.:07:33.

temptation to install fear during the Brexit negotiations. Now to some

:07:34.:07:39.

other news. Tesco has struck a Deferred

:07:40.:07:40.

Prosecution Agreement with the Serious Fraud Office

:07:41.:07:41.

following its investigation into the supermarket's overstatement

:07:42.:07:44.

of profits in 2014 by ?263m. The inflated profit figure

:07:45.:07:46.

was the result of Tesco bringing Tesco has also agreed

:07:47.:07:49.

with the Financial Conduct Authority to set up a compensation scheme

:07:50.:07:55.

for shareholders that It has apologised for the errors and

:07:56.:08:05.

investors will receive compensation of just over $100 million.

:08:06.:08:25.

The billionaire Elon Musk is launching a company that he hopes

:08:26.:08:27.

will merge computers with the human brain.

:08:28.:08:29.

The creation of Neuralink Corp will pursue what Musk calls

:08:30.:08:32.

"neural lace" technology - implanting tiny brain

:08:33.:08:33.

electrodes that might one day enable the uploading

:08:34.:08:35.

The EU's health commissioner says Brazil needs to restore trust

:08:36.:08:39.

in its meat exports after being hit by a scandal over rotten produce.

:08:40.:08:42.

A number of countries have placed tough restrictions

:08:43.:08:44.

The country has seen its daily meat exports plunge by 19%.

:08:45.:08:54.

It comes investigations by the Brazilian authorities found

:08:55.:08:56.

rotten produce and suspected corruption across the industry.

:08:57.:08:58.

The world's largest carrier - American Airlines -

:08:59.:09:01.

is set to buy a $200m stake in Chinese Southern in a bid

:09:02.:09:05.

It's being described as a stretgic partnership -

:09:06.:09:14.

as China is one of the world's fastest-growing aviation markets.

:09:15.:09:17.

The International Air Transport Association predicts that it

:09:18.:09:18.

will surpass the US to become the biggest in terms

:09:19.:09:21.

Our Correspondent, Robin Brant, is in Shanghai.

:09:22.:09:24.

The issue, it's a huge market and one that the American Airlines want

:09:25.:09:32.

to be involved with. Everyone would like a slice of the travel market,

:09:33.:09:36.

especially here, and American Airlines relatively late to the

:09:37.:09:41.

party because United already have a tie-up with China and Delta as well.

:09:42.:09:49.

American Airlines, the latest to the party, but they are the biggest

:09:50.:09:51.

airline in terms of scheduled passengers. China Southern are the

:09:52.:09:59.

biggest in China in terms of flights and passengers they carry, and that

:10:00.:10:02.

is the marriage we are getting. This is part of the broad strategy led by

:10:03.:10:07.

the government in Beijing which owns majority stakes in these three big

:10:08.:10:10.

domestic airlines to change the ownership structure and encourage

:10:11.:10:14.

foreign investors. And tried to bring in a foreign management

:10:15.:10:19.

culture, although this is a 2.5% stake and I don't think we will

:10:20.:10:21.

a big change in terms of the way a big change in terms of the way

:10:22.:10:26.

that China Southern is run. In terms of the service as a passenger on

:10:27.:10:31.

these airlines, I have to say they get you there on time, but expect

:10:32.:10:37.

big delays if you are going to China, often with no apologies, and

:10:38.:10:41.

maybe there is room for improvement and maybe American will do something

:10:42.:10:45.

there. I'm sure they are listing to you and writing notes. Thanks for

:10:46.:10:51.

joining us. -- listening to you. He sounded like a frustrated traveller.

:10:52.:10:58.

And now to the markets. The yen has not moved that much versus the

:10:59.:11:08.

dollar but the markets have stabilised after the wobble that

:11:09.:11:13.

started late Friday when President Trump did not get through his

:11:14.:11:20.

changes to Obamacare. That is what caused a wobble at the beginning of

:11:21.:11:23.

the week but we are back to steady as she goes. Now to Europe, we have

:11:24.:11:29.

the mining stocks pushing up the FTSE 100, they are the big winners

:11:30.:11:34.

so far. We will talk in more detail about what is going on. We can now

:11:35.:11:41.

go to Wall Street first. Donald Trump is keen to make good on his

:11:42.:11:45.

promise to undo barrack Balmer's climate push, especially the clean

:11:46.:11:55.

power plant -- Barack Obama. This is where a significant amount of

:11:56.:11:58.

America's carbon dioxide emissions come from, and the role was a

:11:59.:12:05.

frequent target of Republicans who said it was a job killer and called

:12:06.:12:09.

it government overreach and so no surprise it is on the chopping block

:12:10.:12:13.

and the president is expected to sign an executive order which will

:12:14.:12:16.

make it easier for companies to produce energy in the United States

:12:17.:12:21.

by reversing many of the regulations which were tied to climate change

:12:22.:12:28.

which were set by Barack Obama. There will also be a moratorium on

:12:29.:12:31.

new leases for coal which is mine from federal and lands, but the

:12:32.:12:34.

steps are not likely to bring back the coal industry which was one of

:12:35.:12:38.

the campaign promises of Donald Trump, and there are the global

:12:39.:12:43.

implications for top the clean power plant was an important part of the

:12:44.:12:47.

US meeting the goals set out under the Paris climate agreement but this

:12:48.:12:52.

executive order signals that fighting climate change is not a

:12:53.:12:56.

priority for this administration. Thanks for joining us.

:12:57.:12:58.

Joining us is James Bevan, Chief Investment Officer at CCLA

:12:59.:13:00.

Let's quickly touch on Article 50, a big day tomorrow. The calm before

:13:01.:13:13.

the storm. It will be a very slow burner. We have to spend the next

:13:14.:13:17.

two years at least getting up to speed with what will happen. The

:13:18.:13:22.

reality is we will not have concluded the negotiations and there

:13:23.:13:28.

will be plenty of uncertainties. In terms of the market, they feel more

:13:29.:13:34.

stable today? Yes, they do. Everyone anticipated that Donald Trump 's

:13:35.:13:38.

back challenges on Obamacare were a one-off and at some stage it will

:13:39.:13:47.

file, and there is a sense that he will deliver on tax cuts which is

:13:48.:13:53.

what the recent rally has been about -- it will fail. We can have a look

:13:54.:13:59.

at South Africa, it came across the wires that the finance minister had

:14:00.:14:06.

been hauled back to South Africa, and a cabinet reshuffle is expected,

:14:07.:14:10.

or that is the speculation. The Rand is falling. We know that the finance

:14:11.:14:16.

minister and the Prime Minister do not get on and have got on for ages.

:14:17.:14:25.

Whether or not the five -- finance minister has been called back to

:14:26.:14:29.

learn about another shuffle or this is a power play and he has got to be

:14:30.:14:36.

shown who is boss by the president, but the domestic uncertainties will

:14:37.:14:39.

be bad news for the Rand when the South African economy is doing

:14:40.:14:43.

rather better. The central bank is expected to cut rates very soon and

:14:44.:14:50.

growth is Excel are rating -- is accelerating. James, thanks for

:14:51.:14:56.

joining us. Many people getting in touch about their views on

:14:57.:15:04.

chocolate, some saying they want the same size and others saying you have

:15:05.:15:05.

got to cut down. We meet the firm that

:15:06.:15:07.

sells second opinions And offers to guide

:15:08.:15:10.

you through the confusing - You're with Business

:15:11.:15:13.

Live from BBC News. Let's get more on the news that

:15:14.:15:30.

Tesco has been hit with a fine of ?129 million by the Serious Fraud

:15:31.:15:33.

Office. It follows a two-year investigation

:15:34.:15:36.

into false accounting Theo Leggett has the details

:15:37.:15:38.

in our business newsroom. Theo, let's start first of all with

:15:39.:15:52.

this SFO investigation it goes back to 2014, a huge black hole in their

:15:53.:15:56.

finances. Bring us up-to-date with what we know today? Well, the

:15:57.:16:01.

Serious Fraud Office and Tesco have reached an agreement on a deferred

:16:02.:16:04.

prosecution agreement. That means that Tesco has effectively been put

:16:05.:16:10.

on probation. What did it do wrong? Well, back in August 2014 Tesco

:16:11.:16:13.

published a trading statement. It later transpired that the profits in

:16:14.:16:17.

the trading statement were substantially overstated. Initially

:16:18.:16:21.

it was thought by ?250 million. That figure was later upped to ?326

:16:22.:16:26.

million. So a serious overstatement of profits and it had to do with how

:16:27.:16:30.

Tesco was booking money coming from its suppliers. On top of that

:16:31.:16:35.

agreement to pay a penalty to the Serious Fraud Office, Tesco has

:16:36.:16:38.

reached agreement with the Financial Conduct Authority to pay

:16:39.:16:42.

compensation of ?85 million to shareholders. Why? Well, look at

:16:43.:16:46.

this graph. In 2014 Tesco's share price was falling anyway, but this

:16:47.:16:49.

is what we're interested in here this. Is when the trading statement

:16:50.:16:54.

was published and this is just after all that bad news came through.

:16:55.:16:57.

There was a serious drop in Tesco's share price so it has been told to

:16:58.:17:02.

compensate shareholders and bond holders who were holding shares

:17:03.:17:04.

during that period. So there you have it. A big deal for Tesco. Can

:17:05.:17:12.

you tell us about Booker? Its intended purchase of this company

:17:13.:17:17.

and some major shareholders are not happy and they're going public? This

:17:18.:17:22.

is a major, major deal that Tesco wants to push through, a ?3.7

:17:23.:17:30.

billion purchase of Booker. It owns the right to the budgeon and Premier

:17:31.:17:36.

brands. Tesco thinks it can get into the food away from home market which

:17:37.:17:41.

has more potential for growth than the supermarket business. One of its

:17:42.:17:45.

group has said it is not happy. It thinks Tesco is paying too much and

:17:46.:17:48.

that therefore, this deal offers poor shareholder value. Tesco

:17:49.:17:52.

disagrees. It thinks it's a great deal.

:17:53.:17:56.

Theo, thank you very much. Full details on the website.

:17:57.:18:07.

We are keeping track of the big story of the week. Tomorrow, the UK

:18:08.:18:17.

will formally ask to leave the European Union. London's mayor is

:18:18.:18:23.

warning it would make a mistake fort bloc to try and punish the country.

:18:24.:18:27.

We have been hearing from the London mayor, talking about the trade links

:18:28.:18:31.

between the two. We have had a line out from Germany, from the German

:18:32.:18:34.

Chambers of Commerce saying that Britain's departure from the EU

:18:35.:18:38.

could hurt German firms business with the UK and investment. He says

:18:39.:18:42.

will decline strongly in the long-term. That's the President of

:18:43.:18:46.

Germany's Chamber of Commerce. We will get all sorts of reaction as we

:18:47.:18:50.

approach the deadline tomorrow to trigger Article 50. Two years.

:18:51.:18:57.

A quick look at how markets are faring.

:18:58.:19:01.

A bit of calm. We'll enjoy it while it lasts. It could all take a long

:19:02.:19:11.

time to play out so we will keep you across the changes.

:19:12.:19:15.

President Trump's failed attempt to replace the affordable care act

:19:16.:19:19.

in the US has put the cost of healthcare back in the spotlight.

:19:20.:19:24.

The global cost of health care is forecast to hit a staggering

:19:25.:19:27.

That's 10.5% of GDP - spent solely on health care.

:19:28.:19:33.

So, is there a way to keep costs down?

:19:34.:19:36.

Well, one way could be through early diagnosis and prevention to save

:19:37.:19:39.

And one company says it is already doing that.

:19:40.:19:48.

Alivia Swiss Health will assess your health problems,

:19:49.:19:50.

devise treatment plans and connect patients to leading specialists.

:19:51.:19:57.

It is like getting a second opinion with a highly skilled team.

:19:58.:20:01.

All for an annual fee of around $1,000 a year.

:20:02.:20:07.

Dr Vidar Arnulf is the co-founder and Chairman of Alivia Swiss Health

:20:08.:20:10.

Welcome to the programme. We touched on how it works there. Talk us

:20:11.:20:18.

through the process. How is it different to going to another doctor

:20:19.:20:22.

and saying, "Look, this is the diagnosis I have been given from

:20:23.:20:26.

this guy. Talk me through it." Talk me through the package. We give you

:20:27.:20:31.

access to a number of specialists, we don't think there is only one

:20:32.:20:35.

doctor who can know everything. We have a team of scientists, doctors,

:20:36.:20:39.

internationally who will go through your individual file, assess it and

:20:40.:20:45.

then come up with suggested treatment and diagnostic procedure

:20:46.:20:49.

and verification of that diagnosis. The worst doctor out there is Dr

:20:50.:20:53.

Google, the one you should always avoid because it will fill you with

:20:54.:20:57.

fear, but the point actually there is so much information out there at

:20:58.:21:02.

the moment to anyone that is able to do the search. Why do we need to pay

:21:03.:21:08.

to you do that when we can do this ourselves? Well, I don't think you

:21:09.:21:11.

can do that yourself. If you Google treatment for cancer you will get 28

:21:12.:21:16.

million hits within 0.5 seconds and how do you... If you whittle it down

:21:17.:21:20.

to the name of the particular contrast you have and don't just put

:21:21.:21:26.

"Cancer" You will get a more defined search. There are ways of finding

:21:27.:21:31.

out these things. It takes time. It takes time and you don't know the

:21:32.:21:36.

quality of it. I usually compare second opinions with being sick just

:21:37.:21:42.

like at war. It is the civilian population that is the victims of

:21:43.:21:47.

all wars. The soldiers know what to do and have the information and have

:21:48.:21:51.

the intelligence, they do better and I think when you're sick you're at

:21:52.:21:58.

war with yourself and having somebody to come up with contingency

:21:59.:22:04.

plans and give you knowledge and empower to make the right decisions

:22:05.:22:09.

for you, that's an asset. Is this just for rich people? Looking at the

:22:10.:22:14.

figures here. You have got 500 patients here paying ?800, that's

:22:15.:22:19.

$1,000 a year. In the big scheme of things, maybe it is not that much

:22:20.:22:22.

money, but it is an extra cost. It is a cost that people have got to

:22:23.:22:28.

bear and how do you make money from that, 500 patients paying $1,000

:22:29.:22:34.

isn't much money to run a business? It is not only ?1,000, it is ?800.

:22:35.:22:41.

It starts at ?800. It could be more. It could be less. But we have seen

:22:42.:22:46.

we have changed lives. We have changed the destiny of people who

:22:47.:22:50.

had given up op the health care systems and I think it is so

:22:51.:22:54.

important for us to make that available for as many as possible

:22:55.:22:59.

and that's why we are introducing this relatively reasonable pricing

:23:00.:23:03.

for world experts to look into your case. All right. We are out of time

:23:04.:23:07.

which is a real shame. So much more to discuss. But for now, thank you

:23:08.:23:13.

very much, Dr Vidar Arnulf for come unwilling.

:23:14.:23:15.

-- coming in. A new ?1 coin becomes legal tender

:23:16.:23:22.

in the UK from today. It is being rolled out

:23:23.:23:27.

across the country to tackle It has got more sides. Do you think

:23:28.:23:41.

I can get a new career? As a hand model.

:23:42.:23:42.

This is the first new ?1 coin to be introduced in more than 30 years

:23:43.:23:46.

and will be the most secure of its kind in the world,

:23:47.:23:49.

The first pound coin down the back of the sofa already!

:23:50.:23:57.

We've done nearly 4,000 across the country.

:23:58.:24:09.

It's made out of two different coloured metals.

:24:10.:24:13.

So there's a nickle, a white coloured metal inner

:24:14.:24:15.

In addition we've got a semi-hologram.

:24:16.:24:18.

If you look at it in one direction, you'll see one image.

:24:19.:24:21.

In the other direction, you'll see another imaage -

:24:22.:24:23.

So this pound will buy you less chocolate because it is shrinking.

:24:24.:24:47.

This is about Mars? I eat a lot of chocolate. What we have observed are

:24:48.:24:52.

the costs for chocolate manufacturers have been going up

:24:53.:24:56.

both because of the devaluation of the pound, but Mr Hammond's decision

:24:57.:25:00.

that he should be taxing sugar it make us healthier and the chocolate

:25:01.:25:04.

companies reckon it is there is a pricing point we're prepared to pay

:25:05.:25:11.

and no more and guys we will give awe reduced amount of chocolate

:25:12.:25:16.

rather than putting the price up. We saw it with Toblerone. It has been

:25:17.:25:23.

going on for years. Easter eggs used to be big, fat chunky things and

:25:24.:25:27.

they're getting thinner! What's your favourite? I like Maltesers. Or a

:25:28.:25:40.

Swiss Lint egg. You're a chocolate snob? The texture of chocolate

:25:41.:25:44.

really matters and that's good. James. Thank you. There has been a

:25:45.:25:48.

tonne of responses to our question. If you want to see them all, search

:25:49.:25:55.

the BBC Business Live hashtag on Twitter. A lot of people saying it

:25:56.:25:59.

is for your health too. We will see you soon. Bye-bye.

:26:00.:26:07.

Good morning. Things are changing on the weather front. High pressure is

:26:08.:26:13.

slipping away towards the near Continent and this big low in the

:26:14.:26:17.

North Atlantic is slowly taking

:26:18.:26:18.

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