05/05/2017 BBC Business Live


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This is Business Live from BBC News with Rachel Horne


The chief executive of the world's second


largest investment bank - Goldman Sachs - has warned


that London will stall because of the risks


Live from London, that's our top story on Friday 5th May.


Yep, the big boss of one of the world's largest banks,


Goldman Sachs, tells the BBC about his preparations


for a world after Brexit - that's coming up in an exclusive


A new rival to Airbus and Boeing takes to the skies.


China's first home-grown C919 passenger jet has taken


off on its maiden test flight in Shanghai.


Europe is open, it's all about oil, elections and US jobs figures.


It's been an election campaign that's turned French


politics upside down - now is the last chance for the two


Presidential candidates to appeal for voters before the polls


We'll get the inside track on the last week of the contest


and ask how much the winner can achieve when they get into office.


No specific question today. Just letters know what you think of the


programme. Be nice! The head of the American


investment bank Goldman Sachs, has warned that Britain's financial


centre - the City of London - will stall when the country


leaves the European Union. Lloyd Blankfein told the BBC


that the bank had contingency plans to move staff to mainland Europe,


depending on the outcome At the moment Goldman Sachs employ


6,500 people here in the UK. The bank is due to move


into a new premises in 2019 as it tries to bring all its London staff


into the same building The stakes It has around 34,000 staff


worldwide. As one of the world's most


successful investment banks it made a $7.4 billion profit last year


with the UK operation Our economics editor


Kamal Ahmed is with me. Good to see you. Let's start. There


he is. I will go of script, this is his first interview in the UK for


years? A number of years. Lloyd Blankfein used the words London


could stall. Will stall. Will stall, sorry. How strong is that from the


people you know and we'll talk to? It is a strong warning, it is his


most substantial take on the risks of Brexit, and not just to the


United Kingdom as Britain leads the EU, but also to the European Union.


He does not really want to talk about his own profits and his own


bank, he knows nobody really cares about Goldman Sachs and the billions


of dollars they make every year, but he talks about the businesses that


use the banks to raise money to invest, and governments that use the


banks to raise money for the debts they are carrying. He says if there


is a poor deal, it means the system of funding becomes less efficient


and less secure. I asked him if the UK was less attractive for banks


like Goldmans and others outside the European Union and the single


market. A lot of people elect to have their


European business concentrated in a single place.


for the biggest economy in the world to concentrate would be the UK -


the culture, the language, the special relationship,


If you cannot benefit from access to the EU from the UK,


and nobody knows what those rules and determinations will be,


then the risk is there will be some adjustment that will cause some


people to have a smaller footprint in the UK.


He talks about possibly having to move some people, they play 6500 in


the UK, did he give any indication as to how many that means? They are


being incredibly careful. Britain does not officially leave the EU


until 2019, Lloyd Blankfein said if there was not an implementation


period of at least two years they might have to move more people than


presently. No numbers on that yet but he said he had had discussions,


or the bank had, in Frankfurt, Dublin and other centres where they


could move to. I pushed him on how far they were on planning to move


jobs away from the UK. Without knowing how things will turn


out, we have to plan for a number of contingencies, and our hope is that


we don't have to implement anything until we know what we have to


implement. But if there is no period of time to implement whatever


changes are brought about in negotiations, we might have to do


things prematurely and a range of things a precaution.


Did he mention any other place around Europe that could fill the


shoes of London? If you look at places like Frankfurt and Dublin,


where they have operations already, they have operations across Europe,


in Lloyd Blankfein's words we do not have the legal and regulatory heft


that London has. London is a global financial centre and I think,


frankly, the big winner if London loses some of our financial services


trading into Europe, will actually be New York. Lots of people might


move to New York rather than on to continental Europe, because they do


not have the breadth. The big message was we want to stay


committed to London and Europe, it is better for both sides if the


trade deal between Britain and the EU is as close to what the single


market provides that the moment. Cool. Kamal Ahmed, thank you. Much


appreciated. A great weekend. Let's take a look at some of


the other stories making the news. The oil price has fallen


to a five-month low as investor concerns re-surface


about a worldwide glut. During Friday trading in Asia,


Brent crude dropped to just It means the gains made since last


year's supply cut by the influential Opec group of oil producers have


been largely wiped out. The owners of British Airways


and Iberia - IAG - has reported better than expected


operating profit for the first three months of this year


of almost $187 million. That was before one-off items


and amounted to what the chief executive Willie Walsh said


was a record performance US airline Delta has apologised and


offered compensation to a family who say they were kicked off a flight


for refusing to give up a child's seat. Individual of an incident, a


crew member is film is warning the parents that if they do not get off


they will be committing a federal offence, they will go to jail and


their children will be taken into foster care. It comes after the


incident last month were a passenger was injured after being taken off a


flight. This is my favourite it is all our


lines! I would love a weekly show about our lines!


Shares in the Australian airline Qantas have hit a nine year high


after it said it expected profits for the current financial year to be


In the year to the end of June expects to make $1 billion as demand


It is the flying kangaroo. Guess what, we have more aye lines. I will


start and then I will do is the question. -- lets you ask the


questions. China's first home made big


commercial jet has just landed safely after making


its maiden flight. The plane has been almost ten


years in the making. It is designed to challenge


Airbus and Boeing in Robin, good to see you. We will talk


about what this could mean for Boeing and Airbus, but nearly ten


years in the making, this is a big deal in China? Yes, this is a moment


of national pride. It is a moment for China to prove its technical


proficiency to people here and the outside world. It is politically


important because China's leader, President Xi Jingping, has called


for a growing domestic aviation industry that he says can reflect


the new capabilities of the world's the new capabilities of the world's


number two economy. China is focusing on strategic industries in


its effort to show technical proficiency and expand production


abroad. Part of that is the nuclear and is to, part of that is


high-speed rail, aviation is one of those. This particular jet was first


announced in 2008, we got the Maytin take-off and a safe landing in


Shanghai today, about nine minutes ago. There will be sighs of relief.


The key thing is to develop it and sell it not just in China where, to


be honest, domestic airlines are very much on board, there are 570


orders and options, but how will they do abroad? Make no mistake,


selling domestically is important because the Chinese domestic


aviation markets has the potential to be huge. You have pretty much


answered me, whether abroad or not it is one of the fastest-growing


aviation markets in the world. The country builds an airport what seems


like every year or two. In China alone, Abbas and Boeing looked


towards China for their future order books. This plane and its success


could dent those companies? Boeing has an assembly plant due to open in


Beijing in the North next year, I think. They are trying to move on to


the domestic market. Every time we fly in this country it is an Airbus


Ora Boeing, similar to everyone around the world. This is an effort


to show that China has a burgeoning industry and can take on


particularly those were courses, the 737 and the A320 made by Abbas. --


take on those workhorses. There are about 15 foreign suppliers on board,


the engines and systems are made by foreign suppliers. Getting


international safety approval, there have been issues with aeroplanes


made by this maker and that will be huge test of international


acceptance, which is a crucial part of art for China. Thank you.


Stock markets on the way down today - a plunge in oil prices pulling


down energy companies right around the worls and we'll be talking more


about that with our markets guest Maike Currie in a moment.


Also investors looking ahead to US jobs figures due out later today.


It is children stay. ... Children's day. In Europe, markets are down.


Investors have seen a good run of company results -


almost half of European companies have reported their earnings so far


with 74 percent beating analyst expectations and 6% meeting them.


Samira Hussain has the details about what's ahead on Wall Street.


If it's the first Friday of a new month it can only mean one thing for


business and economic news from America, non-farm payrolls. The


employment rate is expected to have risen slightly to 4.6%, with


analysts expecting the US economy will have added around 185,000 jobs.


Investors will be laser focused on the jobs report and looking for


clues on the US Federal Reserve's interest-rate hike trajectory


through the end of the year. In earnings news, the conglomerate run


by billionaire Warren Buffett will be reporting. The results of


Berkshire Hathaway reduce the date -- announced the day before its


annual shareholder meeting. As of market close on Thursday, one share


in the Oracle of Omaha's company will cost you about $249,540.


There you go. Joining us is Maike Currie,


investment director for personal A familiar face, good to have the


withers. The black stuff, oil, around $47 a barrel. -- good to have


you with us. Google will fundamentally is a case of supply


and demand. As soon as Opec brings in production cuts, the US shale


producers romper production and there are always the other


prejudices, Russia. They are producing at record levels.


OnDemand, a year ago we saw the oil price languishing in the first


quarter of 2016 at around $30 a barrel, there was global growth


slowing, concerns around China, lots of that has disappeared so it is


constantly the balance between demand and supply. We had results


from BP and Royal Dutch Shell, good results, but now the oil price is


starting to slip, what impact could ban have? It is cast a shadow over


those really good results. Shell reported a 136% rise in profits,


share prices up over 30%, but they cautioned times would be tough and


cost-cutting is key. We want the oil price to stay between $50 and $55,


$60 a barrel, that is the golden locks scenario where oil is that


A-level but it is low enough that global growth can continue but high


enough that the oil producers can make money. What about Opec, people


seem to be losing faith in them? There is a meeting on the 25th of


the month, there is an idea that they will cut and people go, are


you? Have they almost lost power? Opec has been disciplined in pushing


through those cuts, but the market is losing faith. They have been


resilient to the fall in the oil price and nimble and of course


Russia... Indeed. You are going to come back and we are going to go


through the papers. Still to come, we'll


get the inside track on the French Presidential


election before voting gets You're with Business


Live from BBC News. International Airlines Group,


which includes British Airways and Iberia, has posted a record


first-quarter performance in what is usually the weakest part


of the year seeing a profit of just Our business Correspondent Theo


Leggett joins us now. Not only is he a redhead, but is


also a bit of an aviation that, like me. You have to take your hat off in


some ways in terms of making money. They have done a job in a


three-month period, so what's behind it? Lower oil? Fuel prices is


certainly part of it. It went down about 10%. There's also a resurgence


in confidence. The industry has been under the cosh lately with the


political uncertainties in the case of International Airlines Group,


including Rex it's because BA is a large part of its business but


there's also been terrorism fears and that sort of things which have


been weighing down on passenger numbers. These numbers this morning


are pretty good. Operating profit, 170 million euros, up from 155


million from the same period last year. These are positive figures.


There are some downsides. The effect of the weak pound, the get their


profit in euros, a lot from British Airways. The currency difference, it


has cost the group as a whole about 32 million euros. Passenger


revenues, also decreased, down by 4.2% although the company said it's


partly due to the timing of Easter holidays which was in March last


year. This year it was in April. The net profit figure was down by


non-operating costs, basically re-evaluating derivative contracts


which means a profit after tax was down by 75% but that's an accounting


gesture. The markets like what they see and their profits are up more


than 4% this morning. Good on you. You can talk, can't you? I had other


questions but you have covered it all. Good on you. We have our


business life page. When the airline is going to learn about PR and


customer service? Picking on a two-year-old! OK.


The chief executive of the world's second largest investment bank


Goldman Sachs has warned that London will stall because of the risks


A quick look at how markets are faring.


We can see they are all down and the big story is oil, it's pulling down


energy stocks and impacting across the world.


The two candidates battling for the French presidency


are spending their last day on the campaign trail


The frontrunner, Emmanuel Macron, is in the southern city of Rodez.


His rival, Marine Le Pen, is campaigning in northern France.


And the state of the economy has been a key concern


Emmanuel Macron wants spending cuts of 60 billion euros.


That's $66 billion over five years with a 50 billion euro stimulus


He also wants to lower taxes and extend the welfare state.


Marine Le Pen has been very critical of austerity.


She has pledged to cut taxes for households and increase welfare


She also argues quitting the Euro would give France the flexbility


The French unemployment rate is stubbornly high at 10%.


Emmanuel Macron wants to invest in training and apprenticeships,


He also wants flexibility on overtime and the


On the other hand Marine Le Pen wants to maintain the 35-hour week,


make overtime tax-free and lower the retirement age from 62 to 60.


They want to lower it. Everybody else's raising it.


Dr Ittie Lotem from the University of Westminster here in London


is an expert on France and joins us now.


Great to have you with us. Can I pick up on one thing straightaway?


Both want to increase the welfare state. France has a deficit problem,


meaning they spend more than it earns in taxes. They want to


increase it? France can't afford it, can it? But as a whole different


question but one of the things, the big problems in France is how to


actually make the economy work, how to this is a take the economic model


whilst retaining some kind of welfare level comfort. One of the


things of course people in France are very proud of is the French


model which has come through after the 2008 crisis, when actually


poverty levels have remained extremely low compared to what's


happening in the UK and the USA, so this is something France is aware of


in terms of maintaining the welfare state. Maintain it, but it doesn't


mean it works. They can't afford it. Their poverty levels are there


because the government is throwing because the government is throwing


more money than they actually earn at its. That's not sustainable. Is


it? The question of sustainability in France always comes down to


unemployment. Just trying to get unemployment down, trying to get


enough people into the labour market, into a working cycle in


order to maintain the welfare state. Of course, one of the biggest


problems in France is unemployment, which has remained stubbornly high


at around 10% for the last 40 years. It is the big building stumbling


whatever they say, the big problem whatever they say, the big problem


is how to get unemployment down. Being realistic, these are two very


different candidate but whoever gets elected they got to try to get these


changes through the legislative into law. What are the chances of that


happening? We have elections coming up in June. Well, your guess is as


good as mine. One of the issues here is of course the French election


system. One will be elected as president, probably Emmanuel Macron


looking at the polls right now, but that doesn't mean they'll have a


working majority. They will have to come through from the legislative


elections in June where any kind of majority is still up in the air. OK,


so we will know the president on Sunday, who is the President of


France but we wait until June to see if they can do anything. If they can


make any reforms, OK. An absolute pleasure to have you with us. Have a


great weekend. In a moment we'll take a look


through the Business Pages but first here's a quick reminder of how


to get in touch with us. The business life pages where you


can stay ahead on the breaking business news and keep you


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Get involved on the business life website. And on Twitter. And on


Facebook. Business live on TV and online whenever you need to know. We


have a story from a Financial Times about Obamacare. Is more than 100


days since his election and it looks like he's finally starting to


achieve his objective is but this is not even definite, is it? No, it


needs to go through the Senate. It's important because the first 100 days


have been a disappointment. He went into office with ten key promises


and has not delivered on any of those. There has been a torrent of


executive orders and minor tweaks but most are been focused on


reversing some of Barack Obama's things he brought in. The key thing


is why does Trump want to push through health care reform? He wants


to get his tax reform through and out of those three things he has


promised, tax reform, infrastructure and deregulation, that's the one the


market is focused on and a lot of the optimism is around that. We've


got 30 seconds, so explain the dead mark oysters of China. Denmark has a


glut of oysters on its coastline and it has gone to the Danish embassy in


Beijing and said, could we sell these oysters to you online? And


they got ten days from when they are picked? They can live up to two


weeks but they are trying to expedite the customs process. The


last thing you want is a dodgy oyster, right? And a great weekend.


I appreciate your time. There will be more business news


throughout the day on the BBC Live webpage and on World Business




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