12/06/2017 BBC Business Live

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

Britain's Prime Minister convenes her new Cabinet for its first

meeting since last week's tumultuous election. Live from London, that's

our top story on Monday 12th of Junne.

As Theresa May fights to stay in power - business leaders warn

prolonged political uncertainty will take its toll on the economy and

sterling. Also in the programme...It could be all change at the top for

Uber after a damaging investigation into its corporate culture throws

the transport technology giant into chaos. Live from London, that's our

top story on Monday 12th of Junne. Away from the chaos of the UK

election, France's new president Emmanuel Macron looks set to win a

landslide in the country's parliamentary elections. Can he

pushed through the major reforms that you promised voters, including

cutting spending and overholding France's strict laws. Do you still

trust the politicians? Do they deliver on their promises? Or do

they just say what you want to hear to win your vote? Let us know, use

the hashtag BBC Business Live. A very warm welcome to the

programme. Do get in touch with your thoughts. The Prime Minister has

formed a new Government, and today she will be holding her first

Cabinet meeting says the election. Senior ministers reappointed by

Theresa May have publicly given Hubbard backing, but several are

reported to have demanded greater influence in return for their

support. Meanwhile, the uncertainty caused by the general election has

led business confidence in the UK to sink through the floor. That is

according to a lobby group that did a poll of 700 of its members. It is

the Institute of Directors, which found a dramatic drop in confidence

since Thursday's election. Mrs May does not command a majority in

parliament, and is hoping to finalise an alliance with Northern

Ireland's DUP. Which has its own economic concerns. As Joe Lynam

outlines. In economic terms, Northern Ireland is less

well-developed than the rest of the UK, all the Republic of Ireland. It

is a small economy, which has low levels of productivity and exports

and heavily dependent on the state. Those sectors are -- apart from the

state that it relies on tourism, manufacturing and fruit. They need

large supplies of low skilled Labour, especially from Eastern

Europe and pollen. If Britain is to leave the Single Market, and that is

the stated policy, the DUP may ask of a derogation of labour. They want

London to pick up $450 million per year that Brussels sensed the

Belfast in agricultural subsidies. That comes on top of the $1 billion

per month that London sends already to Belfast. And then there is the

political, expect the DUP to want a lot more investment in

infrastructure. Joe Lynam with some of the details

as we know them so far. With me is David Owen,

Chief European Economist Nice to see you, welcome to Business

Live. Running through some of the issues, so much to ring and throwing

about whether a deal has been done with the DUP. To start off where we

are economic league, this comes amid a changing economic picture, both

for the UK and Northern Ireland, they are really struggling. Yes, the

wheels have been coming of the UK more recently, and we had some very

disappointing figures in the first quarter which seem to be carrying on

into the second quarter. In terms of Northern Ireland it has

significantly underperformed. Even Scotland in recent years. I think

with the DUP there will be a lot more spending with the North America

economy in particular. But it is sort of just about struggling out of

recession. Compared to the UK, it has done very badly. There is a lot

of horse trading done right now and in the days ahead. Whilst that is

ongoing, business leaders have stepped to the Institute of

Directors that confidence has fallen dramatically, more so than after the

outcome of the referendum to leave the EU, which is interesting. Brexit

Secretary David Davis told BBC radio that the UK will still continue with

its plans to be out of the Single Market. What do you think the

outcome will be for Brexit? One of them actual things following results

on the Friday was that there would be a push for a softer, more managed

Brexit. We need the EU to agree to that, but a softer Brexit is

certainly on the cards. Being within the customs union and having as much

access to the Single Market as possible is obviously where we are

going. The problem with being inside the customs union is you cannot

strike new trade deals with other countries outside the EU, and the UK

will still have to pay for the privilege of having that access. A

softer Brexit is now what is going to be called for, that's fairly

obvious. In terms of the DUP, they don't want a hard border between the

North on the south of Ireland and they still want as much access as

well, because they want good to be moving through Ireland. From a

European view looking out towards the UK, things have fundamentally

change. If you are a European leader, you were told that Theresa

May would approach the negotiations with the hard line. Things have done

a 360, and they are saying what they wanted something entirely different.

It depends how they play this. If they offer concessions to the UK,

you can imagine the scenario where we do not leave the EU at all. That

is entirely possible. Is that feasible? I don't think so. I don't

think EU will come back with concessions and the UK decides it is

not worth going along with this line. We will have to see as soon as

those negotiations commence, there is going to be the financials are

from and, how we play that. Obviously they don't want to blog

about new trading arrangements, until we have settled in principle

by financial market. The whole thing is going to be pretty toxic. The

Bush in the UK will be for a softer Brexit, that is clear. The EU should

recognise that, there should be a transitional phase which will be

helpful for many businesses to work out where we are eventually going.

Things are three up the moment. -- things are very up in the air at the

moment. We will talk about the market reaction later. Let's look at

some of the stories... Uber's chief executive could be

forced to take a leave of absence under changes

being considered by the firm. Reports say the company's

board met on Sunday, but hasn't yet released details

about Mr Kalanick's future. Other reports also suggest that

the company's Chief Business Officer We'll have more on this

from New York in a moment. Jaguar Land Rover has made

a $32 million investment in the minicab-hailing service Lyft,

according to The Times. Lyft is raising money to help

compete with bigger rival Uber. Last year it received investment

from General Motors. Chinese box office ticket sales

could have saved the Hollywood film The Mummy after its weak opening

in the US and Canada. It brought in $70 million in China

and South Korea alone - setting records for films starring

Tom Cruise in the region. The strong start shows big-budget

action-adventure films remain particularly popular in East Asia,

despite waning interest I was looking at the wrong camera!

Let's look at what is on the Business Live page. A lot of

reaction to the shenanigans over the weekend as far as UK politics is

concerned. The pound is steady at the moment. Of course, right next to

it, business leaders and politicians are calling on Theresa May to

consider her strategy on Brexit. Of course there is a real concern about

what the election outcome means for those Brexit negotiations that are

shortly. That is the top story on shortly. That is the top story on

the page. The Institute of Directors poll shows a dramatic drop in

confidence following that result of the election.

Shares in Toshiba have soared today, after reports that Western Digital

has raised its offer for Toshiba's chip business to $18 billion.

It needs that money to deal with its failed nuclear business in the US.

Leisha Chi has the details from our Asia Business Hub.

All of these are just reports but it was enough to send their shares

through the ceiling. Exactly, shares rose by more than 9% in Tokyo, which

shows that investors are cheering the possibility of Toshiba getting a

good for the chip business. They aren't very deep financial trouble

and they need raise a huge amount of money -- they are in very deep

financial trouble. This chip sale, the world's second-biggest producer

of flash memory chips is crucial to that. It is Toshiba's golden egg.

With a company planning to raise its offer, it shows the stakes are high.

According to these reports, it is a last-ditch effort to buy the

division. The problem is, any purchase by Western Digital would

face major anti-trust concerns in America. So we believe that

chip-maker Broad, and a private equity firm called Silverlake are

actually in the leading to buy this chip unit. Toshiba chairs on the way

up, which is unusual because technology stocks were falling in

Asia today of the back of a big fall in some of the value of the big tech

names listed on the Nasdaq, the likes of Apple, Microsoft and co. We

will talk about that issue in a moment in more detail. The markets

morning. That is the close on Friday morning. That is the close on Friday

in the US. Let's have a look in the Europe right now. So much for

investors to get their heads around. The FTSE 100 is down by a third

represent, no surprise given the turmoil politically in the UK. The

one booking the trend is in Paris, doing well off the back of that

strong result for Emmanuel Macron in the parliamentary elections on

Sunday. We will undertake that further soon in this programme.

And Samira Hussain has the details about what's ahead

The big news breaking event this week is the Federal Reserve meeting.

America's Central bank starts its two-day meeting on Tuesday. Whilst

other economic indicators point to a strengthening US economy, inflation

remained stubbornly low. We will find out if interest rates are going

up on Wednesday. Following that announcement, the Federal Reserve

chair Janet Yellen is holding a news chair Janet Yellen is holding a news

conference and guarding that decision. Also happening this week,

either is expected to release the findings from its much and as they

did report -- Uber. By the former US Attorney General, he was called in

to investigate workplace culture and practices after allegations of

sexual harassment at the company. The findings and recommendations for

improvement will be presented to Uber employees on Tuesday. We are

going to talk more about that when we look at the business pages in the

newspapers a little later. Joining us is David Buik

from Panmure Gordon. Good morning, Sally, good morning,

Ben. Interesting weekend. Let's that Emmanuel Macron in perspective, he

did a fantastic job to get a majority just like that. But it is

all down to whether he can make the unions come to hand and the labour

changes, and that is a real problem. We will discuss that in detail about

later. So much still to come. A big week as far as they do is concerned.

I have just looked that the list. UK inflation figures tomorrow, a Fed

meeting in the US on Wednesday, UK unemployment data on Thursday, we

get a great decision in the UK, the markets in Japan, where to start?

Consumer confidence today as well. First and foremost, the IoT figure

is not surprising, if it is still the same in one month, we have to

worry. Consumer confidence is not likely to be good. Inflation has

been up towards the 3% level but I think you will find the drop in 5%

in oil prices, we may have hit the top for the time being. Employment

data may be slightly worse off, but I doubt it very much because I think

still we have sufficient business to make it sustainable because it is on

a temporary basis. A lot of these are lagging indicators. Very

quickly, the Fed, I think we have had disappointing, not disastrous,

but disappointing payroll figures. Also, rather benign wage inflation.

And because Chairman Jarlan is so conservative, I think she will not

change it this month but leave it until September -- Janet Yellen is

so conservative. The business leaders are saying they hate the

idea of uncertainty in the next three months because it is going to

affect investment badly and we need to pick up consumer confidence.

Until we know how the early stages are going to go between the UK

Government, David Davis particularly, and the EU, people are

going to have their pockets on the floor, and that doesn't help. But a

softer Brexit, which you discussed earlier, is inevitable. Particularly

of the immigration policy, which will be softened. We saw from air

bus that unless you do that 10,000 jobs are under the course in the UK,

and that will have a spill-over effect for another 100,000 jobs.

Long-term, it may have the desired effect that will be very good for

the UK economy. David, thank you, nice to see you.

It is about swapping one set of uncertainty for another.

He won the pPresidency and now looks set for a landslide victory

in France's parliamentary elections but can Emmanuel Macron

push through the tough reforms he promised,

including cutting spending and reforming France's

That's all coming on Business Live. Stay with us. We're on BBC News.

The result of the UK general election has resulted in a dramatic

drop in business confidence according to the Institute

They polled 700 business leaders over the weekend who warned that

quick progress was needed on Brexit negotiations.

Steph McGovern is there this morning.

Hello from just outside the Bank of England where lots of people are

starting their working week wondering what on earth all of this

political uncertainty now means for them? And not least, businesses

across the country looking at what impact it might have on them. We

have got Justin with us. There are lots of ways at looking at this.

One, the currency, we saw some movements last week, but that's sort

of stable. And two other areas, confidence and confidence. Business

confidence. Consumer confidence. Business confidence we've had the

Institute of Directors report out showing business losing a little bit

of confidence, but consumer confidence certainly, we've got

issues there. Consumers buying less, and heavily indebted and that will

impact on you and I spending stuff. That confidence has been hit by

uncertainty. We don't know what's going to happen next? That's the

problem. We're not sure what is happening with Brexit. What the

Government is doing or what the Government is. People will say, I

will wait. That's got to change. You want people to know we're heading

that in direction and then we'll invest and then we'll spend and then

you'll get external investors come in. That's it from me here in the

City of London. Two familiar faces, Steph and

Justin. It looks nice in the City of London

actually. Theresa May is facing the 1922

committee as it's known, the Tory backbenchers. A lot of her critics

there. The full details are in the website in the coverage of that. It

will be an interesting day to say the least. As we've mentioned

already, the value of pound, well, it has gone up slightly since the

dramatic fall on Thursday and Friday. Many were interpreting that

because they do feel that a soft Brexit or a softer Brexit will be

the eventual outcome in the on going negotiations.

You're watching Business Live. Our top story:

We're looking at the political turmoil in the UK and the fall-out

for the economy and for financial markets as business leaders in one

of the most esteemed lobby groups warns about the chaos and impact on

business and the economy. Yes, we have been asking for your tweets on

the programme this morning about whether you still trust politicians

given everything that's gone on in the k and of course, over in France

as we'll talk about in a moment. Emmanuel Macron expected to take a

landslide victory in the country's Parliamentary elections. Liz says,

"Do I have trust? Never have, never will. Not even the ones I vote for."

Annabel says, "No, move it on." . It makes an assumption that we had

trust in the politicians to start with." Keep your comments coming in.

Trading for 15 minutes across Europe and France is the one standing out

of the crowd. Let's discuss France in a bit more detail.

And now away from the political upheaval in the UK, France is also

forming a new government, where Emanuel Macron's new party

En Marche is taking control of French politics.

It looks on course to win a landslide victory

following the first round of parliamentary elections.

Projections suggest En Marche could get as many as three-quarters

The final outcome will be decided at a run-off next Sunday.

Mr Macron's party was established just over a year ago and many

candidates have little or no political experience.

With us is Dr Francoise Boucek, Lecturer at the School of Politics

and International Relations at Queen Mary University of London.

Good morning. Good morning. Welcome back. You have been here before.

Let's talk first of all about the challenge ahead. Because on one hand

we're getting caught up in UK politics where it seems nothing will

happen. Over in France Emmanuel Macron won the landslide, expected

to win the Parliamentary elections now too. But he has got quite a to

do list ahead of him. He made bold promises on the campaign trail and

people will be expecting him now to fulfil them? Yes, at the same time,

he is riding a wave of optimism and I think if his party gets up to 450

seats in the National Assembly next week you know France will be in a

very strong position. It's economy is growing twice as fast as Britain.

It will have political stability. While Britain is having this party

politics. It is at the centre of Europe while Britain is slugging

brew the swamps of Brexit! His big promise is to reform the labour

market which Francois Hollande failed to do. And Nicolas Sarkozy

failed to do before him. He has already talked to union leaders the

how successful will he be? Well, his Prime Minister has already started

negotiations and talks with the unions and he proposes to do this

this summer and use the delegated legislation in Parliament to speed

the process so that by the end of September they have a Bill going

through Parliament and the trade union is the dominant one right now

is open to discussions and there are aspects of the labour reform which

will have some appeal to the youth vote as well even though they have

been traditionally more taken by his political message of political

renewal, but at the same time his message of economic renewal which

will devolve power to employers and therefore ease the creation of

employment among the creation of youth where it is low.

Internationally we have seen him stand up to the likes of Donald

Trump. Briefly, how will France figure on the world stage now with

Mr Macron in charge? Well, in the EU first of all, he has got a good

working relationship with Merkel. He's established his presence over

the past two weeks on the G7. On other international fronts. He has

met with Putin. So, I think, he has gained a lot of co-operation and a

lot of optimism on the international stage as well. Time is tight, it is

really good to talk to you. Thank you for coming in and explaining

that. We will speak to you soon. We will see how the reform get through.

But nice to see you. 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 Live page

is where you can stay ahead of all the day's

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live web page: bbc.com/business. On Twitter, @BBCBusiness

and you can find us on Facebook Business Live on TV and online,

whenever you need to know. And this is the line I will say over

and over again, ber and out. An investigation by the former

Attorney-General of the US has looked into Uber's culture, it is

suggested the founder may take a leave of absence. Whether it is a

leave of absence or a real leave of absence, we don't know. Ubber is

moving to a mainstream company. Speaking to big businesses that are

making a leap. Let's turn our attention to Aldi, the German

discount retailer this. Is in the Wall Street Journal planning a big

US expansion plan? They have got 1700. They have been in the States

since the mid-# 70s, you don't think of Americans turning to discount

European-style grocers. You think of Tesco's and Marks Spencer's who

really failed? Well, Tesco failed badly and Marks Spencer's failed

badly. Aldi has always been in it for the long haul. It came in the UK

and didn't do very well and now it's doing very well, it is proceed to

take the long-term view in America. $5 billion to do so? To do another

900 stores and Lidl will open on Thursday its first ten stores in the

States. Gosh. We'll keep an eye on it. Nice to see you. Dominic, thank

you. That's another busy Business Live. We're back at the same time,

the same place tomorrow. We will see you then. See you soon. Bye-bye.