12/06/2017 BBC Business Live


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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


breaking business news. We'll keep you up-to-date


with all the latest details, with insight and analysis


from the BBC's team of editors Get involved on the BBC business


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.


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