29/03/2017 BBC Business Live


29/03/2017

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

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Today's the day - the UK is set to formally tell

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the European Union it's leaving, but how prepared are businesses?

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Live from London, that's our top story on Wednesday, 29th March.

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With just hours to go we will look at the impact on the UK's role

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as one of the world's biggest financial centres.

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We'll assess what's at stake in the trade

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Also in the programme, Samsung launches its latest

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After the disaster of its Note 7 fires -

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will the new device win Samsung headlines for the right reasons?

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And it is a big day for the politics of Brexit, but not

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We'll assess what the markets make of today.

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And we'll get the inside track on the fastest

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growing publishing market, audiobooks.

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It's a global industry valued at $3.5 billion and the boss

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of the biggest company in the business - Audible - is here.

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As the Brexit process formally gets underway how do

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Let us know. Just use the hashtag BBCBizLive.

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Nine months after voting to leave the EU - today begins that process.

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It kicks off two years of negotiations.

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And for businesses in the UK and across the continent it's

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likely to be two years of uncertainty and preparation.

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In the financial heart of the country, several big banks

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have threatened to move staff overseas if they don't get

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Latest figures show it contributes $159 billion a year to the UK

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economy It employs almost 1.2 million people in UK.

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It also contributes a trade surplus of nearly $73 billion to the UK's

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That's to say it brings lots of money into the country.

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$6.6 trillion worth of financial assets are under

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Well, one reason it's so high is what's known as passporting .

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Licences that let banks and other financial firms do business

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94% of all the licences to do that are held by UK registered firms.

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Run us through the day for what will turn out to be a pretty historic

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day? Also a carfully choreographed day, Ben. Theresa May is meeting

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with the Cabinet at Downing Street. Later on, she will head to the

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Palace of Westminster to the House of Commons for Prime Minister's

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Questions and it is after that that she will stand up in the House of

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Commons to make that long awaited speech saying that she has triggered

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Article 50 of the Lisbon Treaty which will set off the process of

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Britain leaving the European Union. As you would probably know, if you

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have been to any dinner parties around the UK lately, this is a

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controversial subject so she will make conciliatory remarks. She will

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say she promises to represent every person in the whole of the UK during

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the negotiations. Now, whilst she is doing that, our man in Brussels, the

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UK's permanent representative to the European Union will travel to the

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Europa Building, the headquarters of the European Council, he will meet

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with Donald Tusk and he will hand over the letter itself. It has been

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signed. After that, there maybe a short formal acknowledgement that

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Article 50 has been received by the council which will appear on their

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website and Donald Tusk may well tweet. The chief negotiator is

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expected to tweet during the day and the European Parliament u the heads

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of the political groups in the European Parliament, they're going

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to be meeting during the day and they'll come out with a press

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conference later. So all of this is very carefully choreographed. What

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happens after that is within 48 hours the European Commission will

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draw up a negotiating mandate, a draft negotiating mandate which the

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27 other members of the EU will have to endorse and give permission to

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the Commission for. Theo, thank you very much indeed. That gives us a

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sense of the timeline. With us is John Longworth,

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former director-general of the British Chambers of Commerce

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but he resigned from that job to I imagine you are excited about this

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process and it formally beginning, something the Prime Minister was at

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pains to say late yesterday was, she is looking to broker a deal that

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will benefit all. High hopes. What are you hoping the outcome will be?

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Well, benefiting all, of course, means doing what's best for Britain

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and we're fortunate that the real benefits of Brexit which there are

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many, can be crystallised entirely by the UK. Entirely independently of

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the European Union, and actually independently of the single market

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and the customs union. We have to leave those two institutions in

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order to get the benefits of Brexit. So whatever happens in the next two

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years, Britain can make itself the best place in the world to do

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business which will boost the economy and which will solve a

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problem of the deficit problems and the balance of employment will

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improve. So Actually, the UK is in a uniquely good position to have the

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best deal for Britain. Even if we don't get a free trade arrangement

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with the EU because a free trade arrangement with the EU is actually

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icing on the cake, it is by no means important as important as the other

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things that we can do. Lots of ifs and abouts, aren't

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there, John and the Chancellor at the time was campaigning for Remain,

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of course, called it a leap into the dark. A leap into the unknown and it

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really is, isn't it? It has never been done before. It is

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unprecedented and we don't know how it's going to turn up. We don't know

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what will happen in the negotiations. The main part is

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around sorting out the administrative arrangements twoon

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the UK and the EU, customs union, border control and so on. That's

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really very, very technical and a process that we can readily go

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through. The rest of it actually is very much known because if it is in

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our gift to actually crystallise those real benefits, removal of the

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CAP, and repatriation of our net contribution and fisheries and

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deregulation, all the things that will boost our economy, those are in

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our gift, it is not a leap into the unknown in that sense because we can

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do the things we want to do. It does depend how the negotiations go. The

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horse trading which will go on for months to come and Brussels made it

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clear it will not be persuaded, it will not be giving the UK an easy

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exit, it will be a very costly exit and for each particular sector and

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industry in the UK, it will mean very different things? Well, there

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is lots of administrative stuff to be sorted out, there is no question

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about that. There will be a lot of heat and light and the EU will be

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upset about it because it is the lifeblood of the commission. There

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is so much more to discuss, John. Thank you for your time this

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morning, John Longworth. Later on today, there will be

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special programming about this, but let's tell our viewers how they can

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get their questions in to us. All sorts of ways of getting in touch

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with the BBC. If you have got any specific business questions about

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the implications of Article 50 then let us know. You can use the hashtag

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there on the screen. We're going to answer your questions on this

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Friday's edition of Business Live. We will let the dust settle and work

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out what it means and send us your questions and we'll answer them on

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Friday. We have been asking whether you think it is good news and bad

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news, and Ian says, "We will be find in the UK. The world is larger than

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us, we must set our horizons." One viewer says, "It maybe wise for the

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individual state, but the long-term consequences could be disastrous."

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Delta Airlines and Korean Airlines have agreed to form a joint venture

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to share costs and revenue on flights across the Pacific

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in a bid to lure customers with more options amid intense competition.

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Delta will be launching new non-stop service between Atlanta

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At the same time Korean Air will introduce new services

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The world's trade association for airlines, IATA, says the US

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and UK ban on laptops in cabin baggage on some flights is not

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It says the ban creates commercial distortions and is not

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The group has also questions why the bans are targeted

:09:43.:09:47.

US President Donald Trump has signed an executive order rolling

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back Obama's plans aimed at curbing climate change.

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President Trump said it would put an end to the "war on coal" and end

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Samsung is due to unveil its latest smartphone later today.

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It is first since it was forced to recall the Note 7 last year

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The South Korean firm hasn't released too many details

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about what we should expect from the S8.

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This is important for Samsung? Don't mess up. You've got a company which

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had the last big launch and the phone caught fire and the top man in

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the company is currently in jail. So away from the razzmatazz in New York

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and London things are not brilliant for Samsung, but all that will count

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for nothing without razzmatazz that Steve Jobs with Apple made his own.

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There will be that kind of fuss, the big questions for the techie people

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big screen without making the phone big screen without making the phone

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any bigger? They will take various bits off the current models and make

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it only screen and find other ways of doing it. There will be a lot of

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talk amongst the gizmo nerds about besles and all that kind of thing

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and whether you can talk to it or not, but at the end of it all,

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Samsung will remember, don't mess up, that's the motto.

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Steve, thank you very much. Steve Evans in Seoul. We will keep an eye

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on how things fair for the firm. Some breaking news out of Asia. News

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that Toshiba's nuclear unit filing for bankruptcy protection. We talked

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a lot about the woes for the firm. It is the nuclear unit of toe Sheba.

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It has been facing multi-billion losses as a result of accounting

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fraud. They should be able to get their financial affairs in order.

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And then you would hope emerge out of the other side, but it will

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protect them while they can do that. So news just in toe Sheba's loss-hit

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nuclear business has filed for bankruptcy protection. More from our

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teams in Asia on BBC Business Live. The focus will be on sterling. Let

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me show you what's happening in Europe. A big day, triggering

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Article 50 later today. Playing out on the markets across the day.

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Opening up higher, but we will get the real impact when we find out

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what is happening over the next two years of negotiations. We're in it

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for the long haul. This is very much the start of the process. Let's head

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to Wall Street. Samira Hussain has the details about

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what's ahead on Wall Street Today. Lulu Lemon will be reporting

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earnings on Wednesday and strong holiday sales will carry the company

:13:15.:13:18.

through their fourth quarter, but investors will be keen to see how

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the company is planning to deal with the fading popularity of leisure

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wear and some stiff competition from other players. Finally, the US

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National Association of Realitiors is expected to report that contracts

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to buy previously owned homes increased 2.4% in February after

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falling 2.8% in January. Joining us is Mike Amey,

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Managing Director and Today is the day, Article 50,

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historic? Yes, it is. We haven't been here before. So as a fund

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manager, that's great. It is interesting to see new developments

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and keeps us on our toes. I guess what is interesting is which markets

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will react. You can argue it both ways. What we will be looking at as

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Ben mentioned is the currency. The currency is the one that seems to be

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most sensitive to the Brexit and whether there will be any kind of

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deal and in which case sterling will probably go up. If both sides stick

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to their current negotiating stance it will probably go down actually.

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What I find really interesting when we talk about Arle 50, markets

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normally love any sort of rumour, any speculation and they'll go hay

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wire as a result. Here, we have got lots of speculation and lots of

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uncertainty and markets are like, we will see how it plays out? You had

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the initial move down post the 23rd June vote. And then sterling has

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stuck around those levels, 1.25ish roughly against the dollar. The

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equity market has done well because sterling has been wack and we wait

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and see what happens. We're hopefully going to get an indication

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of what is going to happen. A rarebit of patience on the markets.

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That never happens. Mike is returning later. We will be tacking

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travel with Mike. We meet the man behind

:15:26.:15:33.

the audio book giant Audible on its small beginnings,

:15:34.:15:37.

how it pre-empted the iPod and its You're with Business

:15:38.:15:39.

Live from BBC News. Leaving the European Union

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will potentially have a huge impact on companies here in the UK

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which produce and export goods. We've been talking to firms

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in the north of England about how I am Simon. Man, managing director

:15:52.:16:16.

of the Acme whistle company. We saw export about 40% Europe. We are

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looking east, we must assume things will get harder in Europe, the free

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market will no longer be for us. There is a tremendous sporting goods

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market, police market, it is almost another world opening up as they get

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richer and there is potential for us, difficult though it will be. My

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name is Paul, I am the managing director. We are an old established

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ceramics factory, we predominantly supply bottles to the spirits

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industry all over the world. Product has go to Europe and that may not be

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a route forward to grow the business. We have put a lot of

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effort over the last six to nine months at looking at the USA is a

:16:56.:17:00.

real business growth opportunity. The pound dollar relationship and

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hopefully a free trade agreement going forward will benefit us and

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our ability to sell into that market place and it is a growing market. My

:17:07.:17:13.

name is Jonathan, we are a specialist flooring manufacturer and

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we export around the world. To the States, the mainland Europe and also

:17:17.:17:23.

obviously a large market in the UK. Having looked at everything, Brexit

:17:24.:17:26.

actually leaves our strategy unchanged. We will carry on

:17:27.:17:31.

exporting to Europe, exporting to the States and dealing with the UK.

:17:32.:17:35.

With the effect of sterling devaluation, we have become so much

:17:36.:17:40.

more competitive that our sails into Europe have become even better for

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us. So for us, steady as she goes, exports into Europe stay unchanged.

:17:45.:17:50.

This afternoon, Daily Politics presenter Andrew Neil will be

:17:51.:17:56.

interviewing exclusively Prime Minister Theresa May, this afternoon

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at Downing Street. You're watching Business Live -

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our top story - Britain is finally set to formally to tell

:18:30.:18:34.

the European Union it's leaving. The pound has been falling

:18:35.:18:37.

and Chancellor Philip Hammond has told the BBC a trade deal will be

:18:38.:18:39.

done. Looking at markets in Europe, these

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are the share markets, all up slightly today following a good

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session on Wall Street the night before, and in Asia.

:18:58.:19:00.

Now we're going to get the inside track on a business

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Audible was founded in 1995, and is now the world's biggest

:19:03.:19:07.

It was bought by Amazon in 2008 for around $300 million.

:19:08.:19:13.

The company now has over 300,000 titles in its library and serves

:19:14.:19:16.

millions of customers from 16 global hubs.

:19:17.:19:23.

From 2007 to 2017, a large chunk of Audible's revenue came

:19:24.:19:27.

from its exclusive tie up with the Apple app store.

:19:28.:19:30.

But in January that deal came to an end after pressure

:19:31.:19:32.

from regulators in Germany and the European Commission.

:19:33.:19:34.

Don Katz is the founder and Chief Executive of Audible

:19:35.:19:37.

Welcome to Business Live. You and I have met before, we cover what have

:19:38.:19:48.

talked about but it was a few years ago. Somewhere on this show. I

:19:49.:19:52.

remember the story of how you started out the career, because you

:19:53.:20:01.

were a journalist... Rolling Stone magazine's corresponded in London.

:20:02.:20:09.

-- correspondence. My wife talks about a nontoxic midlife crisis that

:20:10.:20:14.

changed into a business experience. So how do you move from that running

:20:15.:20:21.

a company that is the business -- biggest in the industry? In my case,

:20:22.:20:27.

I wrote books, as did all of my Rolling Stone and new Republic

:20:28.:20:30.

colleagues of those years and we could not give our readers time to

:20:31.:20:36.

read. We were writing into the same general market, what we did at

:20:37.:20:40.

Audible is unleashed all this time he can't use your eyes to look at a

:20:41.:20:45.

screen or read to effectively read. We have millions of people listening

:20:46.:20:52.

right now, we will project $2.6 billion of hours. It is an

:20:53.:20:58.

incredibly habituated way of using your time to read. The distinction

:20:59.:21:05.

between textual reading and listening to welcome prose

:21:06.:21:07.

literature, and believe me this is performed by very high level actors

:21:08.:21:11.

at this point, it is nonexistent at this point. The time people have is

:21:12.:21:16.

in the time they are exercising or driving, and they are filling it

:21:17.:21:21.

with... Our average listener gets two hours per day of listening in

:21:22.:21:26.

the Audible, which makes it the stickiest media service there is. It

:21:27.:21:29.

is fair to say your business has been changed by technology, it first

:21:30.:21:35.

began with CDs, physical media, and then downloads, and you pre-empted

:21:36.:21:41.

the iPod. We commercialise the first digital player in 1997, developing

:21:42.:21:45.

it from late 95 when it was founded. It was four and a half years before

:21:46.:21:49.

the iPod came out. We were way ahead, perhaps most businesses don't

:21:50.:21:53.

survive that are that off in terms of being too early, but it gave us

:21:54.:21:57.

an amazing amount of learning and an edge and understanding how powerful

:21:58.:22:02.

the spoken word could be, if you unleashed it with really strong

:22:03.:22:05.

technology and then added these incredible powerful performances. At

:22:06.:22:11.

this point, it is why not do Audible? If you can have Andy Newton

:22:12.:22:15.

Lee or Colin Firth or Stephen Fry to read you a book, it harks back to

:22:16.:22:19.

all the pleasures of childhood. You can watch all of those on a screen

:22:20.:22:24.

now and very easily with the wide use of tablet everywhere by all

:22:25.:22:31.

ages. Has that hit you? All of our technology is compliant with

:22:32.:22:35.

tablets, we even have a technology that allows you to read, but Daniel

:22:36.:22:41.

Talbot, and the Audible picks up where you have left. So the amount

:22:42.:22:47.

of money you are making will not be hit by that move? This is really

:22:48.:22:51.

about taking the hundreds of millions of hours per week that

:22:52.:22:55.

people's eyes are occupied and imbuing it with value they've never

:22:56.:22:59.

thought they would have. We have run out of time, thank you so much for

:23:00.:23:05.

coming in. Good to see you. We are going to stay with the technology

:23:06.:23:06.

theme. Two British schoolgirls have

:23:07.:23:14.

qualified for the robotics World Championship in

:23:15.:23:16.

the United States with a robot They will be taking Roy the robot

:23:17.:23:18.

to Kentucky after winning I am Beth and I am eight years old.

:23:19.:23:38.

I am Emily and I am nine years old. We built Roy the robot. He drives an

:23:39.:23:42.

eight foot grid and he has a four bar left that lifts up walls, sets

:23:43.:23:48.

in the scoring zone, and in the middle of the eight foot grid, there

:23:49.:23:53.

is a bridge, and Roy has the balance there with other robots. We are

:23:54.:24:01.

hoping to take Roy to America. We are representing the UK. It is the

:24:02.:24:05.

World Championships and there are 500,000 other teams to compete with,

:24:06.:24:12.

and they are the best of the whole world.

:24:13.:24:15.

Go for it, girls. We asked you what you thought would be the outcome of

:24:16.:24:22.

Brexit. The deal, bad deal, or no Deal. Nothing like Brexit to get

:24:23.:24:27.

people talking and nailing their views to the mast. Lots we can't

:24:28.:24:31.

read out. This one says we are screwed, Theresa May is purely

:24:32.:24:34.

honouring her mandate but there could be problems later down the

:24:35.:24:39.

line. Ian says we are getting our country back, wonderful day, believe

:24:40.:24:44.

we will be getting. Mike is back, let's talk travel. Many think about

:24:45.:24:47.

where they are going to their holidays and for some it would seem

:24:48.:24:51.

that Turkey and places like Egypt are back on the radar. Indeed.

:24:52.:24:55.

Interesting to see how these things develop because the weakness in the

:24:56.:25:00.

pound creates new challenges for going on holiday to Europe so the

:25:01.:25:03.

classic destinations of Spain under pressure. The Turkish lira is very

:25:04.:25:09.

weak. And the Egyptian pound has been under some pressure as well so

:25:10.:25:11.

it looks as though the first indications that people are moving

:25:12.:25:16.

back into those countries, yes. You might go on holiday on a plane built

:25:17.:25:21.

from something different? Sir Richard Branson is predicting that

:25:22.:25:26.

planes could be made by graphene within the next ten years. We have

:25:27.:25:30.

talked a lot about that, it is this one the material. A super thin

:25:31.:25:38.

material that is 200,000 times stronger than steel and a thousand

:25:39.:25:45.

times lighter than paper apparently. The cost of getting people wherever

:25:46.:25:49.

you go is the fuel, so the less you can do that is better and better for

:25:50.:25:53.

the environment as well. Mike, thank you for being with us, Article 50

:25:54.:25:59.

day. A busy day, the big day for everyone, full coverage across the

:26:00.:26:00.

BBC. See you soon, goodbye.

:26:01.:26:05.

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