26/05/2017 BBC Business Live

This is Business Live from BBC News with Jamie Robertson and Ben Bland.

Can the other G7 leaders keep the US President on side over

Live from London, that's our top story on Friday 26th May.

The US President has withdrawn from the Trans-Pacific Partnership

and he's also attempting to renegotiate NAFTA.

We'll ask an expert whether a new era of protectionism

Canada's trade minister tells us why he's optimistic on the future

And it's been a big week for crude - the world's oil-producing

countries agree a deal to extend production cuts.

Markets have been heading downwards on the last few days. The FTSE just

starting up a little bit. We'll take a look at what this means

for prices at the pump. And following the vice

like grip of the handshake between Presidents Trump and Macron,

we're getting to grips with the perfect greeting

and asking how important Yesterday it was NATO,

today it's the G7. A different place, Sicily this time,

a different combination of world Let's take a look at

why it's important. These seven countries account

for getting on for half But many of them are struggling with

comparatively stagnant economies. The International Monetary Fund

is forecasting the world's economy will grow by 3.5% this year,

but just 1.9% in the G7. Also high on the list of worries -

the rise of trade protectionism after President Trump came to power

promising to put "America First". The other G7 members will be

pushing him to soften this position. Then there's the environment -

the future of the 2015 Paris President Trump has threatened

to pull the US out of the deal. His fellow G7 leaders

will try to convince him otherwise. The hosts, Italy, are at

the forefront of the migrant crisis. They will be pushing plans

to strengthen Africa's economies - to try and cut the number

of migrants leaving - and to promote food security

for developing countries. Geoffrey Yu, head of

Investment Office UK at UBS at UBS Wealth Management,

is with me. Plenty on the agenda, what do you

think will be the main priorities that they will be focusing on first?

Probably trade and where Donald Trump stands, is he going to follow

up with certain threats made during the election campaign to basically

through protection arisen -- protectionism around the US,

particularly with what happened with the Trans-Pacific Partnership, and

this could be a very interesting dialogue. What about Teater, the

American European agreement? Donald Trump of the nail in that coughing,

is there any chance of it coming back? -- what about TTIP. At this

point it would really be quite a U-turn, after moving away from the

TTIP to embrace a new partnership. But they will try to convince him

otherwise of the benefits and the business lobby in the US will be

pushing for something as well. Climate is a big issue, there is the

Paris agreement that Trump has threatened to pull the US out of, is

that realistic or just his starting position for negotiations to try and

make it more favourable to the US? I would say it is a starting position,

there are ways to preserve the framework or domestically targeting

certain industries that may struggle a bit with this agreement, so trying

to provide benefits for injections around those, but he has a domestic

audience and he is going to play to that. He rode to power almost on the

coal industry, those old rust belt industries. That is very important

for him as part of his core constituency. Having said that, he

is not going to lose that constituency but he needs to show

after the bad news domestically of late, he needs to deliver some

results. The other interesting aspect is what they are going to do

to help African economies. The host, Italy, is at the forefront of the

migrant crisis, people coming to their shores in the hope of a better

life. What realistically can they do to help support Africa's economies

and reduce the need for people to leave? The most important thing is

to not apply a broad brush to all North African economies at this

point, there are differences between Morocco, Libya is the issue right

now, former colonial power, they need to make sure there is stability

from the failed state and with the tragic events in Manchester that has

come to the forefront as well so that should be the starting point,

combat institutional structures, failures and make sure terrorism is

contained. Jeffri, many thanks.

Let's cross to Canada, where -- to Singapore, where Canada's Trade

Minister is on a visit. Donald Trump talked about the trade

deal, he said it was a disaster costing millions of American jobs.

He has talked about withdrawing from it completely if he cannot get

better deals with Canada and Mexico. So Canada has been looking further

afield, to Asia, in fact, to sign some new deals. This week the

Canadian Trade Minister has been touring Asia, Vietnam, Singapore,

South Korea and Japan. We spoke to him today and he told us that Nafta

has been extremely beneficial, not just for Canada but for the US as

well. This agreement has provided millions of good middle-class jobs

on the boat side, 9 million jobs in the US depend on Canada but what

makes it different is the relationship is unique, because we

don't sell to each other, we make things together. Look at a car, for

example, a typical car would often cross the border seven times before

reaching the consumer so this agreement has been good, provided

millions of middle-class jobs, and by the way this has been done two

decades ago, it has been amended 11 times already so obviously we are

proactive, we are confident, we will put things on the table, the US will

do so, and it has to be in the interest of all three parties.

The Canadian Trade Minister speaking to the BBC a little earlier today,

trade is a major theme for Asia with Donald Trump having pulled out of

the TPP, as you were saying earlier, lots of countries in this part of

the world are looking for new partners in the wake of that

withdrawal and are looking to redraw the trade map, so one to watch for

years to come. Thank you very much indeed.

Let's have a quick look at the market, the McKay down a touch,

three quarters of a percent, the Dow ended yesterday at an all-time high,

Surrey, the Dow a little bit of the all-time high. The European markets

have just started, not a huge amount of movement but all down and key to

that is the oil price, we will be talking about that in a second.

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

It's the Friday before a long weekend in the United States.

Monday is Memorial Day and a federal holiday which means US

It is also the unofficial kick-off to the summer,

but before we fire up the barbecues, some economic news to get through.

The second reading of the US GDP, the gross domestic product growth,

in the first quarter is expected to be revised up 0.9%

Also happening on Friday, the Commerce Department will release

durable goods data which is likely to have dropped 1.2% in April.

Finally, the University of Michigan's survey of consumers

releases its final May consumer sentiment index.

This is important given two thirds of the US economy depends

The more confident Americans feel, the more they will spend.

Joining us is Mike Amey, managing director and

Good to see you. The oil price down sharply, is there a sense among

investors that oil producing companies did the bare minimum of

what was expected and no more? Exactly, coming into the meeting

there was an expectation we would cease production cuts, guided that

way by the Saudis and the Russians, and really what they did was exactly

what they said they would do. I think there was a little bit of hope

and expectation that maybe you would get more than just the Saudis and

the Russians, so a few more oil-producing would join the

production cuts, that not happen, they did what they said they would

do but the markets got ahead of themselves and we saw on the day a

big move, 5% down is a big day limu. I have this picture in my mind of

the Saudis, the Russians, Opec, trying to cut production is the

price goes up, and the Americans on the other hand throwing oil in as

fast as they can from the shale oil producers, trying to make as much

money as possible and push the price down. There is an element of truth

to that. Saudi and Russia, Government revenues are so dependent

on oil revenues, they want to keep prices as high as possible.

Unfortunately other producers over in the States, where the cost of

production is around these kinds of metals, so unfortunately it is hard

to get the price much above this because then you get this big supply

from the US, so you have these two competing forces, which is why daily

moves can be quite big but in the long-term the oil price looks like

it'll be pretty stable, inbred towns around $50 a barrel. At the pump,

which is what a lot of people care about, we would expect prices to be

stable for the next year or two. The US markets DD again, the SNP and the

Nasdaq both at record highs. What is going? The move is seen to be quite

sharp at the moment. It is impressive, you get this impressive

regular stock markets, most of them up 10% this year, we are only in

May, and you get this continued rise. We get bouts of uncertainty

but broadly speaking most economies are doing well, unemployment rates

are coming down, earnings are holding well and if earnings hold

well when people look for places to put their money, deposit rates are

low, they look elsewhere and that is why the stock market is doing well.

From your point of view, I would have thought the states are a bit

risky at the moment? We have a preference for European stocks

because the European stock market economy is a couple of years behind

the US on the recovery so we would agree that the US looks like it is

ahead of the cycle... And too expensive, do you think? We would

say fair to a little bit expensive. Thank you, you will be back to talk

through some of the paper stories with us.

Stay with us on Business Live. We'll get the Inside Track on this

week's big economic stories. It's been an important week

for Greece and China - You're with Business

Live from BBC News. House prices in London are predicted

to fall in real terms across 2017 - marking the first time this has

happened since 2011. Hometrack's latest report shows

annual house price growth in London is already running at less

than a third of the levels Theo Leggett has more

from the Business newsroom. This is a survey of house prices in

cities up and down the UK, exclusively cities, and it seems

there is a north-south divide, or rather it comes in at the Midlands,

because if you look at the southern cities, growing very rapidly in

terms of house prices over the last few years, not just London but

Bristol, Oxford, places like that, the rate of growth has gone down

quite significantly from double figures to single figures, as you

said in London we are looking at house price growth falling below the

rate of inflation and therefore real terms falls for the first time since

2011. But if you go to the Midlands,

Birmingham and beyond, you see pretty big increases. In Manchester,

house price growth last year was about 6.3%, it is now 8.4%.

Leicester, Nottingham, Birmingham, also Edinburgh, all of the city

showing an increase in price growth and the

reason is that in the southern cities where growth has been strong

up to now, there is an affordability problem, people are being priced out

of the market. There is also a question of investors becoming less

keen on buy to let property because of changes to the stamp duty regime,

so you have this real difference between London, the Home Counties,

the South of England, and the rest of the United Kingdom.

OK, thank you very much indeed for that.

Let's see what is on the Business Live page. The biggest UK tech

flotation for two years, a British software developer valued at nearly

?1 billion, which would make it the biggest UK tech firm. It is called

Alfa Financial Software. Software for the financial industry, I don't

quite understand it! This is quite a good job, professor

of play, sponsored by Lego, Paul Brown John Downey.

A ?4 million grant to help fund that.

It pays for a lot of Lego bricks! You are watching business life.

Greece failed to secure to unable to get an extra in Stormont for its

bailout. Our economics correspondent Andrew Walker joins us now. We have

been here before. We may well be here again. Yet again we have a

Greek debt repayment deadline looming, money owed to investors and

the European Central Bank coming in July and Greece needs the next

bailout payment which has been delayed for many months in order to

meet that debt obligation. We have been there before as well. On one

occasion Greece missed a payment deadline to the International

Monetary Fund by a short time. But what has been happening is Greece

has now made reform commitments to satisfy the rest of the eurozone.

They have also got the commendation of the International Monetary Fund,

but some of the rest of the eurozone who would be making this payment

indirectly through a eurozone agency, particularly Germany, wants

to see the IMF sign off on the programme is being credible and the

IMF is not prepared to do that. It thinks the projections for the Greek

government finances and economic growth are not credible, they are

too optimistic. They also think Greece needs some commitment to debt

relief. There have been some narrowing of differences. There is a

chance they will sign it of in mid-June when they meet, but they

are not there yet. Regardless of all the details, a former Treasury

Secretary says it does not make sense, there is a big hole in it.

What is going on is the Donald Trump Administration has come up with a

budget that includes proposals for cutting taxes and a central part of

their economic strategy is the idea that tax cuts and deregulation will

stimulate stronger economic growth, give incentives to businesses to

invest, people to work more, and also the idea is that by cutting tax

rates you eliminate or reduce the incentive to avoid taxes. So they

are saying that the stronger economic growth will both offset the

tax cuts by generating a larger taxpayers, but they also say it will

help them close the budget deficit completely and eliminated by the end

of a 10-year period. You can do one but not the other. That is what

Larry Summers has suggested, but the Trump administration rejects this.

But a whole load of people are joining in on the criticism. Another

point critics have made is the assumption is in these budget

projections is the US economy will grow at 3% per year over this

10-year period. Many regard that as unrealistic. Yes, the US has done

that in the past but productivity growth has been slow recently and

the population is ageing, so a lot of people will be retiring and not

generating that economic growth. One of the other big stories, Moody 's,

the ratings agency downgrading China for the first time in almost 30

years. It is worth emphasising the credit rating is still comfortably

in investment-grade territory. We are talking nothing like a

downgraded to junk status, but it is still striking. It reflects a

slowdown in economic growth in China which we have talked about a lot in

the last few years, plus Moody's assessment of the way in which China

is responding to it. China wants to make this slowdown carefully managed

and not too sharp. There has been quite a lot of stimulus coming from

the Chinese government to ensure that is the case. Because Moody's

have concerns, they are more likely to put the burden of any stimulus on

fiscal policy, so more government borrowing and concerns about

increasing debt amongst some of the state-owned enterprises and local

government which makes them think the debt situation combined with

slower economic growth means it is not as strong as it was. Is it a

real problem, debt? Not an immediate problem but across the economy as a

whole. We are talking about 30-50% of GDP, which compared to Greece is

very small! But there is household debt, local government and state

owned enterprises, all of these add up to the burden which is quite

large for a country at that stage of economic development, but not an

immediate catastrophe. Andrew, thank you very much. A quick reminder of

how to get in touch with us. The business live page is where you can

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Twitter and Facebook. Business live on TV and online, whenever you need

to know. Let's see what other

stories are being talked We were talking about the handshake

between the two presidents. It was a battle of the grips, rather than a

greeting. Quite vice like. How important is the handshake? Is it

still important? I think it is. Unfortunately these two people have

not met each other before and the first time they do it is in front of

the world's cameras and they have both got a point to make. Who won

it? The bookies' conclusion is that Emmanuel Macron might have just got

this one. It will be interesting next time and every time they meet

because people will be looking to see what happens. I think now, yes,

absolutely, the next few times they meet that is what we will look for.

There are videos of Donald Trump's embarrassing handshakes and there

are a whole mass of them. He wants to make a point. Presentation is

very important to him and one of the ways you try and get an early score

is this. It is testosterone. That was our Twitter question, how

important is handshake? James says, it is a file one. Ryan says for some

reason people do not give a firm handshake back. He is wondering what

is going on. It was a bit aggressive. Thank you

for those tweets. What else was in the papers? We were talking about

the World Bank and this is interesting. It is about clarity of

language and keeping things nice and simple. One of their economists has

been attacked for saying that he wants a limit on the number of the

word and in a report. Izzy on to something or is he being pedantic? I

think he is. If you have been lucky to see one of these reports, and the

IMF and the World Bank produce dense documents, and his point is can we

get the punch line out early and tighten up the language?

They need journalists. We do not tend to go on at length and may

question is longer than they need to be and carry on and go on and on. I

labour the point, but there you go. We are all guilty of this, but it is

that aim for brevity. He says he wants to reduce the

number of ands down to 2.6%. You can get carried away with the statistics

which economists do. But he has got a fair point because these reporters

are dense and quite long and if you have a point to make, make it early

on and then have the rest of the document to back it up. There is

another one we wanted to talk about, the age of retirement. The World

Economic Forum saying that maybe we should look at retiring at 70 to

avoid a pensions crisis. Indeed. This is the UK.

If the UK does it, everyone else will have to. If one Western country

goes that way, there will be a momentum and in a year everyone will

do it or nobody will do it. The challenge is as we are all lucky to

see our life expectancy rise, we need to pay for that somehow.

Working longer is one of the best way to do it. I take exception to

this, this is the World Economic Forum. This is the elite, all of

whom could retire at 30 and they are telling us we have to keep working

until 70. I had a tweet earlier saying it is

difficult for people in heavy industries. Maybe for news

presenters it is fine, but not for everyone.

This is heavy industry, mate! I am saying nothing! That is it.

There will be more business news throughout the day. Have a good

weekend, goodbye. Good morning. If you have plans for

the bank holiday weekend it