18/05/2017 BBC Business Live


18/05/2017

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

:00:09.:00:12.

Global market turmoil intensifies with Wall Street

:00:13.:00:18.

experiencing its worst day since the presidential election.

:00:19.:00:22.

Live from London, that's our top story on Thursday 18 May.

:00:23.:00:40.

Stock markets around the world are nervous that the political

:00:41.:00:42.

controversy around President Trump will overshadow his

:00:43.:00:45.

Also in the programme - Alibaba heads West.

:00:46.:00:58.

China's 300 billion dollar e-commerce giant looks to America -

:00:59.:01:00.

And this is what the numbers look like at the start of trade in Europe

:01:01.:01:08.

as that Trump Slump rolls around the world.

:01:09.:01:10.

We hear how the man behind Regus serviced offices turned his quest

:01:11.:01:17.

to find a flexible workspace into a multi-billion dollar empire.

:01:18.:01:20.

And if you struggle with recycling, you're not alone.

:01:21.:01:24.

The worst products to recycle have been named and shamed -

:01:25.:01:33.

so we want to know what are your recycling frustrations?

:01:34.:01:36.

Get in touch use the hashtag #BBC Biz Live.

:01:37.:01:47.

Send us your comments about that. My question is whether you can put

:01:48.:01:56.

envelopes in recycling if they have the plastic window?

:01:57.:01:59.

For months, optimism about the Trump presidency has been powering

:02:00.:02:03.

But late on Wednesday the Trump bump turned into the Trump slump -

:02:04.:02:09.

as US stocks and the Dollar suffered their worst day

:02:10.:02:12.

It's down to growing concern that the President's promised tax

:02:13.:02:15.

cuts and pro-business reforms may never materialise,

:02:16.:02:17.

as the White House battles one controversy after another.

:02:18.:02:19.

The Dow Jones industrial average fell 372 points,

:02:20.:02:24.

and both the Dow and S 500 suffered their worst falls

:02:25.:02:29.

The Nasdaq had its biggest loss for almost a year.

:02:30.:02:42.

That is what markets are looking like. We will talk more about the

:02:43.:02:53.

dollar in a moment. The last time the Nasdaq fell this much was when

:02:54.:02:58.

the UK voted for Brexit. This is the US dollar against ten

:02:59.:03:07.

leading currencies over the last year put up it has lost all of its

:03:08.:03:11.

game since Donald Trump became president and is now back to where

:03:12.:03:15.

it was last November. Look at the spike and fall away again.

:03:16.:03:19.

Our economics editor Kamal Ahmed is here.

:03:20.:03:23.

Thank you for being with us in the studio. We were anticipating this

:03:24.:03:30.

rally would not go on and on but the political turmoil has really

:03:31.:03:34.

intensified in the last 48 hours with regards to President Trump.

:03:35.:03:39.

That was the trigger. What has been happening is there have been some

:03:40.:03:43.

headwinds growing against this exuberance that was in place after

:03:44.:03:48.

Donald Trump was elected with this big promise about tax reform,

:03:49.:03:56.

appropriateness agenda, doubling gross in America. -- a pro business

:03:57.:04:01.

agenda. There was inability in the White House to drive through

:04:02.:04:06.

legislation in the houses in Congress. They were both run by

:04:07.:04:10.

Republicans. That reform failed. There was a wobble around that. Then

:04:11.:04:15.

were the weakest in three years. Has were the weakest in three years. Has

:04:16.:04:21.

the American economy been doing as well as people thought? Another

:04:22.:04:28.

wobble. Then, exactly as you say, there was always an idea, would

:04:29.:04:33.

Donald Trump as president be like campaigning Trump or would he become

:04:34.:04:40.

a more traditional political figure? The political controversies have

:04:41.:04:44.

continued and so there is a volatility in politics which I think

:04:45.:04:49.

has now led, this has been a spark for people looking back to the

:04:50.:04:54.

reform agenda, will the tax reforms come through? Is the American

:04:55.:04:57.

economy doing as well as people thought? The political turmoil will

:04:58.:05:03.

continue. Suddenly it is a risk of. If you are things like Treasuries

:05:04.:05:07.

and defence investments like utilities and properties, they are

:05:08.:05:12.

all up. Things like the equity markets, they are all down. People

:05:13.:05:18.

have gone risk off. Safe havens is very attractive right now with the

:05:19.:05:23.

price of gold going up, etc, and began getting stronger. There is a

:05:24.:05:27.

lot of disappointment within the business community in the US and

:05:28.:05:32.

elsewhere about the fact, his priorities in a way. They wanted

:05:33.:05:38.

these economy boosting members, tax reform, that kind of thing to come

:05:39.:05:42.

in much sooner. We are beyond the 100 days and all of that. Now there

:05:43.:05:51.

is this political storm. They have realised that the politics makes

:05:52.:05:55.

chances of that getting through the houses more difficult. And, of

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course, the fact is that the Republicans may not be in control of

:06:00.:06:05.

both Houses by the time president Trump gets halfway through his

:06:06.:06:09.

presidency because of the elections. He has a rather small window. If he

:06:10.:06:18.

does not get the report was through, you are right. People believe there

:06:19.:06:24.

will be reform but there are risks that the reform may not happen and

:06:25.:06:32.

they have increased. Someone on the campaign trail promises one thing

:06:33.:06:35.

and does not necessarily deliver. It was a question of, would there be

:06:36.:06:39.

greater stability once he was president and once he surrounded

:06:40.:06:43.

himself with businessmen from Goldman Sachs, for example? As a

:06:44.:06:49.

president, he was quite similar to how he campaigned. To the

:06:50.:06:53.

traditionalist it all seems quite random things would happen in

:06:54.:06:57.

different ways. That means the volatility is still barefoot about

:06:58.:07:01.

is why people are pulling back a bit and the Trump 's aid has come after

:07:02.:07:05.

all the exuberance. Let's take a look at some of

:07:06.:07:09.

the other stories making the news... There have been protests in Brazil

:07:10.:07:11.

over a fresh corruption allegation. President Michel Temer has denied

:07:12.:07:14.

a report that he authorised bribes to silence a possible witness

:07:15.:07:17.

in a huge corruption scandal. A Brazilian newspaper says it has

:07:18.:07:21.

obtained recordings of a discussion between the president

:07:22.:07:25.

and the chairman of the giant US and EU officials have decided NOT

:07:26.:07:27.

to impose a ban on laptops and tablets in cabin baggage

:07:28.:07:32.

on flights from Europe. But after meeting in Brussels

:07:33.:07:35.

to discuss the threat to aviation safety, officials said other

:07:36.:07:38.

measures were still America has previously said it

:07:39.:07:39.

wanted to extend the ban - which covers eight mostly Muslim

:07:40.:07:45.

countries - to Europe. Let show you a story about Facebook.

:07:46.:08:12.

The competition commissioner has been tweeting about this.

:08:13.:08:24.

That is a really interesting story that is emerging. She was a guest on

:08:25.:08:30.

this programme. Some of the tweets you have been

:08:31.:08:39.

sending in today. We asked, what are your frustrations with regard to

:08:40.:08:41.

recycling quest of their rather the top six offenders. Coffee pods are

:08:42.:08:53.

the worse things. Paul says, trying to remove bubble wrap from Jiffy

:08:54.:08:57.

bags drives him mad. You peel the little plastic window. Is that how

:08:58.:09:04.

it works? You put the paper in the recycling and the plastic in the

:09:05.:09:06.

bin. Keep your comments coming in. To Japan now, where economic growth

:09:07.:09:10.

is picking up fast - Japan's economy grew at an annual

:09:11.:09:13.

rate of 2.2% in the first three It's the fifth quarter in a row that

:09:14.:09:18.

growth has improved - that's the best run in more

:09:19.:09:22.

than a decade. Are we getting excited about this

:09:23.:09:28.

thinking it is finally working? Seijiro Takeshita is in Tokyo

:09:29.:09:32.

for us, he's a professor Always good to see you. Put it into

:09:33.:09:47.

perspective for us. Is the Prime Minister thinking this is working or

:09:48.:09:53.

are we getting over excited? Unfortunately, it is the latter.

:09:54.:09:59.

Last year rises were horrible because of the bad weather. We are

:10:00.:10:05.

getting much better in terms of capital expenditure by corporations.

:10:06.:10:08.

You need to see a wage rise boosting private consumption that is not

:10:09.:10:12.

happening and I do not think it will happen considering the Conservative

:10:13.:10:16.

nurse of the Japanese companies. As we said, the third quarter in a row

:10:17.:10:21.

that growth has improved and the best run for more than a decade. We

:10:22.:10:25.

have been keeping such a close eye on it stopped expectation for Japan

:10:26.:10:33.

has always been so high. Is the worst over? We will face a lot of

:10:34.:10:36.

ambiguity, particularly in the United States, and also in Europe.

:10:37.:10:40.

The growth you have been talking that has been driven by exporters.

:10:41.:10:46.

Where we are seeing ambiguity factors overseas, there is

:10:47.:10:50.

cloudiness in the forefront. That is one reason why people are not

:10:51.:10:55.

rejoicing as numbers suggest. Thank you for your perspective on the

:10:56.:10:57.

latest news out of Japan. Joining us is Jane Foley, Senior

:10:58.:10:59.

Currency Strategist, Rabobank. You have been listening to all these

:11:00.:11:06.

conversations about what is going on in the United States. We have been

:11:07.:11:09.

talking about Japan with currency playing a huge part and the dollar

:11:10.:11:15.

weakening significantly. This does not help Tokyo at all. Give us your

:11:16.:11:20.

take on all of this. The yen is a safe haven. Whenever there is little

:11:21.:11:25.

attention the yen goes up. The dollar perhaps is more interesting.

:11:26.:11:30.

It has a very murky relationship with safe haven flows. The US

:11:31.:11:35.

Treasury market, US government debt, is a prime piece of paper people

:11:36.:11:40.

want at times of political stress. That can support the dollar. Now the

:11:41.:11:46.

dollar is under pressure because the market is disappointed the reform

:11:47.:11:49.

programme may not happen. A quick word on that. We talked about at the

:11:50.:11:55.

start of the programme, what was happening in the United States. Is

:11:56.:11:58.

it general disappointment that all of the sugar high we got on the

:11:59.:12:03.

campaign trail may not turn out to be much? If we look back to where

:12:04.:12:06.

the markets were today compared with where they were, there is a big

:12:07.:12:13.

change in US equity markets. They hope the reforms that Donald Trump

:12:14.:12:17.

made would cut away a lot of regulation and boost growth. Donald

:12:18.:12:24.

Trump is so busy trying to firefight with all of these scandals. Here in

:12:25.:12:30.

Europe, the UK has had a lot of economic data this week. More today

:12:31.:12:36.

could give us your expectations. The trend we have been seeing in retail

:12:37.:12:40.

sales since December has been one of weakening trend. The reason for that

:12:41.:12:46.

is inflation. Inflation is rising at a higher rate than wages. We have

:12:47.:12:50.

had confirmation of that. That means the money we have in our pockets

:12:51.:12:55.

after we spend out on items like food and petrol is less. That is

:12:56.:12:59.

down to the weakness of the pound. It is down to the weakness of the

:13:00.:13:04.

Sterling exchange rate relative to this time last year. Jane will

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return. Sharing with us your recycling frustrations. Indeed. She

:13:10.:13:11.

has got the list. Alibaba - the Chinese e-commerce

:13:12.:13:19.

giant that's been described as the country's eBay and Amazon

:13:20.:13:22.

rolled into one, is expected to report another jump

:13:23.:13:24.

in profits later today. It shares have been soaring since it

:13:25.:13:30.

floated in New York and it now has a stock market value of $300 billion.

:13:31.:13:35.

The vast amount of the business is in China which is something

:13:36.:13:45.

billionaire to change. He loves this country and he loves China. For

:13:46.:13:51.

president Trump, the best way forward Jack to show his love this

:13:52.:13:55.

country is to make it easier for Americans to sell their wares to

:13:56.:14:02.

China. This sneaker shop in Manhattan is an example. It has a

:14:03.:14:07.

physical store but 90% of the business is done online. Since

:14:08.:14:10.

August but they have been selling on Alibaba and it has been a big boost

:14:11.:14:17.

to their sneaker empire. Over $100 million this year. They run like a

:14:18.:14:21.

start-up, which has been really refreshing. We're not -- they treat

:14:22.:14:33.

us like we are a trusted multi-billion dollar company. The

:14:34.:14:42.

leader of China's big asked -- biggest e-commerce retailer wants to

:14:43.:14:47.

bring business to China and 2 billion customers in the next

:14:48.:14:50.

decade. They have been talking about making a big push out of China since

:14:51.:14:56.

they became public company and prior to that when they filed to become

:14:57.:15:00.

public and number of years ago at this point. If you look at the

:15:01.:15:06.

revenue base, it is almost entirely treated to China. They might well

:15:07.:15:10.

have aspirations and talk about that. The numbers suggest there is a

:15:11.:15:14.

lot of work to be done on that front. He is not afraid of a little

:15:15.:15:19.

hard work. You will be in the US next month to make his pitch

:15:20.:15:23.

directly to US businesses. It just may be an uphill battle.

:15:24.:15:28.

We meet that man cashing in on the flexible working boom -

:15:29.:15:35.

It's made him a billioniare and says Brexit could be good

:15:36.:15:38.

You're with Business Live from BBC News.

:15:39.:15:50.

Here is a pet peeve we have been discussing this morning.

:15:51.:15:54.

Do you find it hard to know what you can and can't recycle?

:15:55.:15:58.

I think we all do, especially where we live, all different rules for

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different boroughs. And today the worst items to recycle

:16:03.:16:04.

have been named and shamed. Pringles tubes and Lucozade

:16:05.:16:08.

bottles topped the list We are running short

:16:09.:16:10.

of holes in the ground Yet landfill sites are peppered

:16:11.:16:15.

with products that are supposed The trouble is that so many products

:16:16.:16:23.

nowadays have several different types of materials

:16:24.:16:29.

in their packaging. That can make them almost

:16:30.:16:31.

impossible to recycle. The foil interior, the cardboard

:16:32.:16:33.

sleeve, the metal bottom. There are different plastics

:16:34.:16:51.

in the base of the bottle Black plastic is virtually

:16:52.:16:58.

useless for recycling. So what will stop us dumping complex

:16:59.:17:09.

packages straight into the bin? Well, Prince Charles is launching

:17:10.:17:15.

a $2 million prize to stimulate new and more environmentally

:17:16.:17:17.

friendly designs and packaging. If the competition works,

:17:18.:17:22.

it will be easier in the future to shop for items that

:17:23.:17:24.

do not fill a landfill. One interesting point from fine

:17:25.:17:40.

repair cafe, it gives you an indication of where they are coming

:17:41.:17:43.

from, suggesting that you need to repair more stuff, bring broken

:17:44.:17:48.

stuff in the repair, we achieve a 63% the pay rate. Repair, repair,

:17:49.:17:55.

repair. Another big story today, Royal Mail posting a big rise in

:17:56.:18:01.

profits as parcels improved. I assume the money they make from

:18:02.:18:05.

delivering parcels is improving, annual profits up by 25%. Growth in

:18:06.:18:09.

parcel delivery business, it would seem it is doing well. It does well

:18:10.:18:14.

from online, we send fewer letters but we get more parcels delivered

:18:15.:18:17.

because of our online shopping habits. Full details on the website.

:18:18.:18:33.

European markets, markets worldwide, we are watching them very closely as

:18:34.:18:42.

the turmoil surrounding the White House and the Trump administration

:18:43.:18:45.

intensifies. So let's quickly show you how things are going right now

:18:46.:18:49.

so you have a sense of how the European day is progressing. Down

:18:50.:18:53.

half a percent in London and elsewhere. This was after quite

:18:54.:18:57.

heavy losses yesterday as well for the European markets, so not a

:18:58.:19:01.

change in sentiment yet. The big question, can President Trump get

:19:02.:19:05.

through those reforms he promised? Markets are increasingly doubtful

:19:06.:19:06.

that will happen. All businesses need somewhere

:19:07.:19:10.

to work but for many being able to shrink or grow their office

:19:11.:19:12.

is neither easy nor cheap. So companies that provide rented

:19:13.:19:15.

work spaces are growing quickly - cashing in on our need

:19:16.:19:18.

to be more flexible. London is the world's largest market

:19:19.:19:20.

for flexible serviced office space with around $21bn -

:19:21.:19:22.

that's ?16 billion worth The USA and UK top the list

:19:23.:19:25.

for co-working , that's when you share a work space

:19:26.:19:32.

with other people who work And It's not just freelancers

:19:33.:19:35.

and small businesses that use them, big multinationals like

:19:36.:19:50.

Google, HSBC, McKinsey And perhaps that why it's been such

:19:51.:19:55.

a profitable business for IWG - its brands include Regus and has

:19:56.:20:00.

3,000 centres in 110 It's the result of nearly 30 years

:20:01.:20:03.

work for founder Mark Dixon. I caught up with him at one

:20:04.:20:08.

of his co-working spaces here in London to hear how it

:20:09.:20:11.

all began. I started off with sandwiches,

:20:12.:20:25.

delivering them on a bicycle, I didn't have my driving licence at

:20:26.:20:29.

the time. The business was a failure but my customers were very happy.

:20:30.:20:35.

Just tell us how that prepared you for running Regis now, which is huge

:20:36.:20:41.

and 110 countries. I worked out I needed more experience. I travelled

:20:42.:20:45.

all around the world, did lots of different things working for other

:20:46.:20:50.

people, gaining experience. But with a goal. The goal was to run my

:20:51.:20:56.

business and do it well. So what inspired you to start Regus? I had

:20:57.:21:06.

my first expenses myself trying to get an office and I could see other

:21:07.:21:09.

people were having the same problems, they were meeting in

:21:10.:21:12.

coffee shops accept. I thought there was an opportunity and from that

:21:13.:21:16.

single centre we still have we now have over 3000 buildings. What makes

:21:17.:21:20.

you the person that can do that transition? You have to be someone

:21:21.:21:26.

willing to learn, adapt. You have to be adaptable Camier have to be able

:21:27.:21:31.

to hire good people, build a team. We are in a fast growing industry,

:21:32.:21:35.

this is a new sector, this is new real estate, how people can work in

:21:36.:21:41.

the future. Yes, there is more common vision that everyone is

:21:42.:21:45.

growing in this marketplace. But it is a marketplace where you truly

:21:46.:21:49.

have to be global, you think, to survive? What is important is to

:21:50.:21:54.

have national networks, so we are growing in each country National

:21:55.:21:57.

platform so companies within that country can work anywhere, people

:21:58.:22:00.

can work from home, dropped in. It is a new way of working. So scale in

:22:01.:22:08.

a country is probably more important than global scale, but the two work

:22:09.:22:13.

together. London is an extremely busy city for you, probably the most

:22:14.:22:17.

important in Europe, in terms of demand for your services. How does

:22:18.:22:24.

Brexit affect what you do? I think we are concerned about Brexit, but

:22:25.:22:27.

we are pretty bullish on the UK market. So what we can see is UK

:22:28.:22:34.

companies very adaptable, a lot of companies adopting new flexible work

:22:35.:22:37.

practices, so although there may be changes that will come once Brexit

:22:38.:22:46.

finally arrives, there is lots of runway for our particular business

:22:47.:22:49.

and the whole of the UK and in London. Did you want Brexit? Diyas.

:22:50.:22:57.

I am a European at heart, you know, I love Europe. The environment we

:22:58.:23:00.

are in at the moment where political risk is such a big deal. For

:23:01.:23:05.

examples over the last couple of years, elections and the United

:23:06.:23:09.

States, we have one coming up here in the UK, France, Germany, not to

:23:10.:23:13.

mention Asia, where you have a big presence, how do you measure

:23:14.:23:17.

something like political risk? Generally speaking, all of these

:23:18.:23:21.

things are not bad things far business because we are providing

:23:22.:23:25.

businesses with flexibility at variable cost. But do shocks like

:23:26.:23:29.

poor example the 2008 financial crisis actually give you an

:23:30.:23:34.

opportunity? The short answer is yes but I would rather not do 2008

:23:35.:23:39.

again. All of these shocks make companies think more deeply about

:23:40.:23:42.

how they are operating, how can we become more flexible? And especially

:23:43.:23:46.

in real estate, which is one of those fixed things that most

:23:47.:23:50.

companies rarely have difficulty changing, difficulty reducing cost,

:23:51.:23:55.

difficulty in making that variable. So what is next to you? You have a

:23:56.:24:00.

lovely home in Monaco, are you going to retire and enjoy the super

:24:01.:24:05.

yachts? What are you going to do next? I have got to finish this job

:24:06.:24:11.

first. This, for me, is really a job that is unfinished. I think the best

:24:12.:24:14.

time for our businesses is coming now. The new digital world, more

:24:15.:24:23.

competition from new players. I love business, it sort of like a sport,

:24:24.:24:27.

it's absorbing, it's passionate. So I think our best time is yet to

:24:28.:24:31.

come, think there are enormous possibilities, so I am quite excited

:24:32.:24:34.

about the future. I am not ready to retire just yet. He absolutely

:24:35.:24:39.

showed no signs of wanting to retire, that was Mark Dixon, who

:24:40.:24:42.

started his career delivering Salmond is on a bike. Jane is back

:24:43.:24:46.

with us to talk through some of the papers. We have been asking people

:24:47.:24:50.

about their recycling horror stories, this was after the six

:24:51.:24:55.

worst offenders were named in shaded and, Pringles tube 's, Lucozade

:24:56.:25:00.

bottles stop you are a fan of recycling, you are building an

:25:01.:25:04.

eco-home? I am definitely trying to build an eco-home. It is very slow.

:25:05.:25:09.

But I think we all have a responsibility for recycling, and of

:25:10.:25:13.

being conscious of the legacy we are leaving on this planet. But one

:25:14.:25:17.

thing, despite all the different bugbears I have, one thing that

:25:18.:25:21.

comes as a common to nominate, and that is the amount of packaging and

:25:22.:25:24.

the amount of difficult to recycle packaging. I think the manufacturers

:25:25.:25:28.

need to be told that there need stability packaging, because the

:25:29.:25:31.

amount of rubbish that one family can produce in just one week is

:25:32.:25:37.

huge. It is phenomenal. It is huge, it takes a huge amount of and we

:25:38.:25:41.

need less of it. I agree with you Jane. The sponsors frustrated, every

:25:42.:25:50.

packet is currently not recyclable. Having four bins in my kitchen but I

:25:51.:25:55.

am happy to cycle. That might be the future. Thanks, Jane, good to see

:25:56.:25:58.

you and to have your company as well goodbye.

:25:59.:26:06.

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