10/07/2017 BBC Business Live


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10/07/2017

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This is Business Live from BBC News with Ben Bland and Alice Baxter.

:00:00.:00:07.

As the industry gathers in Turkey, will the second half of the year

:00:08.:00:19.

Live from London, that's our top story on Monday 10th July.

:00:20.:00:37.

Oil prices have yet to show much of an increase

:00:38.:00:40.

despite the continued production cuts from OPEC.

:00:41.:00:42.

Full steam ahead for Chinese shipping giant Cosco.

:00:43.:00:55.

A $6 billion bid for rival OOIL would make it the world's third

:00:56.:00:58.

The figures are all in positive territory. We will look at what the

:00:59.:01:14.

week might have in store for the markets.

:01:15.:01:15.

Man has always relied on the oceans for fishing and trade,

:01:16.:01:18.

but what threat do over-fishing, climate change and plastics pose?

:01:19.:01:23.

We'll speak to the woman behind a new charity trying to flag up

:01:24.:01:26.

Are your streaming habits impacting your sleep?

:01:27.:01:34.

Today we want to know, are your streaming viewing habits

:01:35.:01:36.

It's all too easy, you start watching one episode, you think, one

:01:37.:02:01.

more, and the hours just go. As one of the world's most

:02:02.:02:03.

important commodities, the cost of everything from filling

:02:04.:02:11.

up our cars to shipping For the top oil producing

:02:12.:02:14.

nations, it also underpins So perhaps what everyone

:02:15.:02:18.

at the World Petroleum Congress in Turkey wants most

:02:19.:02:21.

is the stability to plan ahead. As you can see, while a global deal

:02:22.:02:31.

between major producers, but not the US, to limit supply has

:02:32.:02:33.

somewhat stabilised the price of the black stuff,

:02:34.:02:36.

oversupply now means the price In fact, the oil price is down

:02:37.:02:38.

more than 12% this year, with an uptick in global demand

:02:39.:02:45.

insufficient to absorb rising output, a lot of it

:02:46.:02:49.

from the United States. The latest data shows

:02:50.:02:56.

that US oil production - driven by shale oil output -

:02:57.:02:58.

rose 1% last week to 9.34 It used to be the case that US shale

:02:59.:03:01.

production wouldn't be cost effective with a price below

:03:02.:03:09.

$50 a barrel. However, increased efficiency

:03:10.:03:18.

and technological advances Since 2013, the average price

:03:19.:03:20.

at which it becomes profitable has dropped from $80

:03:21.:03:23.

per barrel to $35. Trevor Sikorski is the head

:03:24.:03:29.

of natural gas and carbon Ben was talking a lot about oil and

:03:30.:03:45.

Rex Tillerson is an oilman, so it was expected that he might talk at

:03:46.:03:49.

length about in Turkey. He actually didn't. The focus was more on gas.

:03:50.:03:56.

Yes, that is one of the interesting things about this. Thematically,

:03:57.:03:59.

when you look at the conference, it is as much about gas and

:04:00.:04:02.

sustainability as it is about oil. It is almost like yes, there is a

:04:03.:04:07.

lot of supply out there and rain in the supply in has been a challenge.

:04:08.:04:12.

The longer term challenges are more on the demand side. What will happen

:04:13.:04:17.

with energy transition? What role does gas play in that? What role do

:04:18.:04:24.

renewables play? All of that will probably squeeze oil. Why do you

:04:25.:04:28.

think Rex Tillerson took that tack? I think that now, he's not speaking

:04:29.:04:34.

as the head of the world's largest oil company, he is speaking as

:04:35.:04:38.

Secretary of State the US. And a big part of US policy under Trump has

:04:39.:04:43.

been pushing ahead in trying to progress US natural gas exports.

:04:44.:04:51.

Last year, the US became a natural gas export of the first time,

:04:52.:04:56.

investing a lot in export capacity. This is a big thing for Trump. It

:04:57.:05:03.

creates jobs domestically, and it also makes gas more expensive in the

:05:04.:05:09.

US, which is good for coal, which is another big part of Trump. We talk a

:05:10.:05:13.

lot about shale production in the US and how that contributes to the glut

:05:14.:05:19.

around the world of oil and gas and keeps prices suppressed. It is a

:05:20.:05:27.

dramatic level to which prices have dropped. That will surely just

:05:28.:05:30.

encourage the shale producers to keep pumping the stuff out.

:05:31.:05:36.

Absolutely. Shale production is a new technology. We have seen huge

:05:37.:05:44.

increases in the advancement of those techniques. That creates more

:05:45.:05:57.

supply. With the latest down and pick in crude prices, we are

:05:58.:06:00.

starting to see a slowing in drilling activity in the US, but it

:06:01.:06:07.

is still healthy. The demand for oil is not going to be helped by big car

:06:08.:06:12.

companies like Volvo and VW saying they are going to do try and get rid

:06:13.:06:16.

of their internal combustion engines and go electric. Tesla today were

:06:17.:06:21.

unveiling their mass-market model. This is the big threat for oil. The

:06:22.:06:28.

electrification of transport. It is exciting because it is new

:06:29.:06:30.

technology and it is very good for the climate. But within that, you

:06:31.:06:37.

need to have low carbon fuels generating a lot of electricity. Gas

:06:38.:06:42.

plays into that because it is a lot less carbon intensive than oil or

:06:43.:06:54.

coal. So when you look ahead as a transition fuel, gas has a big role

:06:55.:06:59.

to play. That is why it is so high on the agenda. Trevor, good to talk

:07:00.:07:02.

to you. Let's take a look at some of

:07:03.:07:03.

the other stories making the news... Tobacco giant Philip Morris has been

:07:04.:07:07.

ordered to pay millions of dollars in legal fees after unsuccessfully

:07:08.:07:10.

suing the Australian government In 2012, Australia legislated that

:07:11.:07:16.

cigarettes must be sold in unappealing packets

:07:17.:07:21.

with graphic health warnings. The International Permanent Court

:07:22.:07:24.

of Arbitration hasn't published the amount Philip Morris must pay,

:07:25.:07:28.

but Australian media Kuwait Airways and Royal Jordanian

:07:29.:07:32.

have become the latest Middle Eastern airlines to remove

:07:33.:07:38.

restrictions on passengers taking laptops in the cabin

:07:39.:07:40.

on US-bound flights. Both carriers said they had

:07:41.:07:45.

worked with US officials The US imposed the ban in March

:07:46.:07:48.

on direct flights from eight mainly Muslim countries to address fears

:07:49.:07:55.

that bombs could be The former boss of one of the UK's

:07:56.:07:57.

leading supermarket chains, Sainsbury's, has told the BBC that

:07:58.:08:10.

Brexit will mean higher food prices, Justin King says the UK food

:08:11.:08:13.

system has been shaped by the European Union for 40 years

:08:14.:08:16.

and leaving will be tough The Chinese shipping giant Cosco

:08:17.:08:19.

look set to buy its Hong Kong and would make Cosco the world's

:08:20.:08:31.

third biggest shipping company. Monica Miller is in our

:08:32.:08:36.

Asia Business Hub in Singapore. What more do you have on this? Cost

:08:37.:08:50.

those stocks are gaining traction after the news broke of the weekend

:08:51.:08:54.

that the shipping company offered to buy its rival, Orient Overseas

:08:55.:08:59.

International out of Hong Kong for $6.3 billion. That will make it the

:09:00.:09:03.

third biggest container ship company in the world. This comes at a

:09:04.:09:06.

crucial time for the Chinese government that wants to raise its

:09:07.:09:09.

global shipping profile, which was a big part in its initiative aimed at

:09:10.:09:14.

increasing a supply chain to the West. They will now have 400 vessels

:09:15.:09:18.

to achieve that goal. But analysts say that the sooner shares often

:09:19.:09:23.

fall after an announcement like this. But Cosco's stock rose to its

:09:24.:09:31.

highest in almost two years today. Monica, thanks.

:09:32.:09:34.

Tokyo stocks closed higher as Chinese data kept investors

:09:35.:09:43.

upbeat on the global economy while a weak yen boosted exporters.

:09:44.:09:49.

They were also lifted by Wall Street's strong

:09:50.:09:52.

performance on Friday, while the US dollar extended gains

:09:53.:09:55.

made after much stronger than expected June employment data.

:09:56.:10:04.

Let's show you how the European markets begin the trading week. All

:10:05.:10:16.

of them are in positive territory. We will see what Janet Yellen as to

:10:17.:10:19.

say when she makes her speech later this week. What the US Fed does will

:10:20.:10:23.

have an impact on other markets around the world. We will get into

:10:24.:10:25.

that in a moment. Samira Hussain has the details

:10:26.:10:27.

about what's ahead On Monday, a trial is set to begin

:10:28.:10:29.

against General Motors. The claim is that a faulty ignition

:10:30.:10:35.

switch caused a power failure General Motors has conceded

:10:36.:10:38.

that an earlier version of the switch was defective,

:10:39.:10:41.

but denies any such problem with the newer version at issue

:10:42.:10:46.

in this upcoming trial. The other big event happening

:10:47.:10:49.

this week is of course the Federal Reserve chair

:10:50.:10:51.

Janet Yellen's testimony This is her semi-annual appearance,

:10:52.:10:53.

where she will be asked questions No doubt she will certainly be asked

:10:54.:10:58.

about the Fed's plan to reduce some Finally, the week ends

:10:59.:11:03.

with a bit of a bang as some of America's biggest banks

:11:04.:11:07.

will report second-quarter earnings. Joining us is Jeremy Stretch,

:11:08.:11:14.

head of currency strategy Let's start with talking about the

:11:15.:11:31.

US dollar. It has been given a boost by better-than-expected jobs

:11:32.:11:35.

numbers. Indeed. The US Labour market continues to generate a large

:11:36.:11:40.

number of jobs. The Labour market is tight in the US. That implies that

:11:41.:11:43.

economies are growing at a reasonable clip and by virtue of

:11:44.:11:46.

that, that suggests that the Fed's policy of raising rates gradually

:11:47.:11:51.

still has further to run. So that sets the template for Yellen's

:11:52.:11:54.

testimony on Wednesday and Thursday this week. Talking of that, what are

:11:55.:12:01.

your main expectations to come out of that? As I say, the markets are

:12:02.:12:06.

looking for the backdrop of the interest rate story. Not only what

:12:07.:12:10.

they will do about interest rates, but also what they will do about

:12:11.:12:14.

balance sheets. They have bought huge numbers of US Treasuries. They

:12:15.:12:18.

need to gradually release those back into the market. Markets will be

:12:19.:12:22.

looking for signs on both interest rates and the balance sheets, and

:12:23.:12:25.

that will have implications for the dollar and other global banks. Other

:12:26.:12:29.

central banks are considering raising rates as well. They will

:12:30.:12:34.

also be looking for hints about the Fed started paper it's balance sheet

:12:35.:12:39.

and selling the bonds it holds. Indeed. We have seen interest rates

:12:40.:12:45.

in terms of bonds are moving significantly, so that does create

:12:46.:12:48.

uncertainty in relation to things like mortgage rates, because if bond

:12:49.:12:51.

yields were to rise too quickly, that would push up mortgage rates or

:12:52.:12:57.

would risk pushing them up. So there is a difficult balancing act here,

:12:58.:13:00.

and markets are watching to see how Janet Yellen will pursue that over

:13:01.:13:06.

the next few weeks. Another major economy we all look too is China.

:13:07.:13:11.

They had some inflation data out. They did. They had both consumer and

:13:12.:13:15.

producer price inflation, and those numbers were in line with where the

:13:16.:13:19.

market would like things to be. We were not seeing prices moving too

:13:20.:13:24.

slowly so we were not seeing a defect risk. But we are not seeing

:13:25.:13:29.

prices are increasing too quickly, which would imply that the central

:13:30.:13:34.

banks would need to move faster. So it is a Goldilocks scenario as far

:13:35.:13:37.

as the Chinese inflation story is concerned. Inflation is going up,

:13:38.:13:41.

but not too quickly. One of the by-products of that is what is

:13:42.:13:44.

happening in the oil markets, going to your previous discussion. It is

:13:45.:13:48.

important that we don't see oil prices moving up to dramatically,

:13:49.:13:51.

because that would have implications for inflation. We have that major

:13:52.:13:58.

meeting of Opec members later in the week. Jeremy, you will take us

:13:59.:13:59.

through the papers later. We'll get the inside track

:14:00.:14:05.

on a new charity trying to keep our oceans alive

:14:06.:14:09.

for Generation Z. You're with Business

:14:10.:14:11.

Live from BBC News. The takeaway industry is said

:14:12.:14:23.

to be worth ?4.5 billion, but a new trade group representing

:14:24.:14:25.

the sector says it's struggling. The British Takeaway Campaign -

:14:26.:14:34.

a new umbrella group representing the sector -

:14:35.:14:37.

has commissioned a report from the Centre for Economics

:14:38.:14:39.

and Business Research and it shows despite the record number

:14:40.:14:43.

of jobs in the sector, businesses are struggling

:14:44.:14:45.

with recruiting staff and inflation Graham Corfield is the managing

:14:46.:14:47.

director at Just Eat, What changes do you want to see? It

:14:48.:15:10.

is important to celebrate the success we have had and to keep

:15:11.:15:16.

things running. British businesses contribute to the economy. Right

:15:17.:15:22.

now, the challenges are around skill shortages and the impact of the

:15:23.:15:24.

recent rates evaluation. What practical steps can be done to

:15:25.:15:34.

improve the situation for businesses? At British Takeaway

:15:35.:15:39.

Campaign we are keen to talk to the Government on the skills shortages

:15:40.:15:45.

side around vocational training, British people see takeaway as a

:15:46.:15:50.

career opportunity and huge opportunities within it, we're

:15:51.:15:52.

working with the Government to make sure that vocational qualifications

:15:53.:15:56.

include a takeaway module within it so that it addresses the skills

:15:57.:16:05.

shortages across many cuisines. There is certainty as we head to the

:16:06.:16:10.

Brexit discussions and the immigration system, making sure both

:16:11.:16:13.

EU and non-EU workers working in the sector today are assured of their

:16:14.:16:17.

roles but equally understanding that the new rules as they go forward

:16:18.:16:24.

understand there are specialist skills sets that underpin the

:16:25.:16:35.

sector. Do you feel the Government is listening to you? It is great to

:16:36.:16:44.

see some certainty is being issued. When I talk to restaurant owners

:16:45.:16:49.

they are concerned it could have a serious impact on the sector, it is

:16:50.:16:54.

a 9.5 billion sector and we need to sustain it to make it continue. We

:16:55.:16:59.

are going to have to leave it there, thank you, you are watching Business

:17:00.:17:00.

Live. As the oil industry gathers in

:17:01.:17:17.

Turkey, prices are up slightly. Let's have a look at the markets are

:17:18.:17:22.

faring. The main indices across Europe, this is how they look at the

:17:23.:17:26.

start of the trading week. All in positive territory.

:17:27.:17:32.

And now let's get the Inside Track on a social enterprise

:17:33.:17:35.

which is hoping to raise awareness of environmental issues.

:17:36.:17:37.

We Are The Oceans aims to tackle the issue of plastic waste

:17:38.:17:40.

in the world's oceans, and it's taking aim

:17:41.:17:42.

The not-for-profit organisation focuses on getting its message out

:17:43.:17:46.

via millennial-friendly mobile games, and collaborations with

:17:47.:17:47.

We Are The Oceans has already generated support

:17:48.:18:02.

from gaming giant Rovio - the creator of Angry Birds -

:18:03.:18:05.

fashion house H, and global sports brand Vans.

:18:06.:18:06.

We're joined by Daisy Kendrick, the founder of We Are The Oceans.

:18:07.:18:12.

Thank you for joining us here in the studio. We began by saying that your

:18:13.:18:20.

organisation is aimed at raising awareness amongst young people,

:18:21.:18:24.

so-called generation Z. Your generation, if you like? Exactly,

:18:25.:18:31.

our aim is to bring the oceans to the most connected generation using

:18:32.:18:34.

technology, gaming and platforms we engage with every single day. How

:18:35.:18:41.

easy or difficult was it to get onto, for example, the makers of

:18:42.:18:44.

Angry Birds and say, we want to do something with you, because their

:18:45.:18:48.

brand is so strong, they have a well-established business, how

:18:49.:18:52.

receptive were they? They were very receptive, they have a huge existing

:18:53.:18:56.

audience and we, as a charity, could tap into that and reach people on

:18:57.:19:00.

their terms and engage them in experiences that they are already

:19:01.:19:04.

engaging with, and Rovio were open to supporting the cause and pursuing

:19:05.:19:09.

their social responsibility angle with us as well. It is impressive

:19:10.:19:13.

stuff, because, if you don't mind me saying, you are only 23 said to get

:19:14.:19:18.

onto a platform like Angry Birds is hugely impressive, but it is not

:19:19.:19:21.

just gaming apps and things, it is things like music festivals and

:19:22.:19:24.

more? We are appealing to millennials with music as well, we

:19:25.:19:28.

have a collective and will be releasing a song later in the year

:19:29.:19:31.

called We Are The Oceans but we have multiple versions of the song using

:19:32.:19:38.

mainly YouTube influences to do their version and spread their

:19:39.:19:40.

version of the song to their audiences. I wonder what your aim is

:19:41.:19:45.

with the organisation because it has been going for eight months now so

:19:46.:19:49.

still fairly early days, what is your ambition for a? Our ambition is

:19:50.:19:54.

to educate as a primary cause, but we also want to support small island

:19:55.:19:59.

developing states and those communities that are completely

:20:00.:20:02.

dependent on their oceans for their livelihood, their food and their

:20:03.:20:06.

income. Overfishing is a major concern, isn't it, and as I

:20:07.:20:10.

understand you began with an on project in March this year in Haiti,

:20:11.:20:23.

where it is a huge problem? We started with the community on the

:20:24.:20:28.

Western point of the island that is in famine, ten years ago the

:20:29.:20:30.

community was driving with fish to eat and sell at market but today

:20:31.:20:32.

because of overfishing, pollution and climate change this community is

:20:33.:20:34.

dependent on food packages. How do you fund the campaign? We are

:20:35.:20:37.

fortunately supported by the United Nations office of projects and

:20:38.:20:39.

services who are a division of the UN, who are great supporters of this

:20:40.:20:42.

start-up campaign, which is quite unique. Do you have any ambitions to

:20:43.:20:48.

source more private funding? Jess, private funding and collaborations

:20:49.:20:53.

with brands in particular because We Are The Oceans is striving to bring

:20:54.:20:58.

innovation into supply chains and fund and develop alternative

:20:59.:21:01.

products, and until sustainability becomes the norm in the supply

:21:02.:21:04.

chains, big change for the environment will not be able to

:21:05.:21:08.

succeed. I was going to say, that is where the challenge comes because

:21:09.:21:12.

you can get individual consumers to change their habits but until you

:21:13.:21:16.

get the big brands to buy into it and the big retailers, it almost

:21:17.:21:20.

feels part like a drop in the ocean whatever we do. By 2020, generation

:21:21.:21:23.

Z will be 40% of the consumer market, and they are seeking and

:21:24.:21:41.

wanting to buy sustainable products but there is not enough in the

:21:42.:21:44.

market right now. Daisy, thank you for coming on, we wish you the best

:21:45.:21:47.

of luck with everything. Daisy Kendrick there, founder and CEO of

:21:48.:21:48.

We Are The Oceans. Let's bring you the latest

:21:49.:21:48.

in our CEO Secrets series where we ask the bosses

:21:49.:21:51.

of the world's biggest organisation Today it's the turn

:21:52.:21:53.

of Alex Beard, chief executive It's got to be all about the people.

:21:54.:22:05.

I'm Alex Beard, chief executive of the Royal Opera House, and I have

:22:06.:22:10.

the very best job in the world! Every single night, round about 300

:22:11.:22:14.

people come together to make something pretty well impossible

:22:15.:22:21.

happen on our stages, and that is to present Lyric theatre, ballet and

:22:22.:22:25.

opera at the very highest level and that means individual passion but

:22:26.:22:31.

also organisational brilliance. The machine has got to work like a lot

:22:32.:22:35.

work towards that 7:15pm moment when the lights go down, the curtain goes

:22:36.:22:40.

up, and you, the audience, are transported into a different world

:22:41.:22:44.

and a different sense of yourself. So each individual needs to feel

:22:45.:22:47.

passionate sense of commitment about what goes on stage. Simply, hire an

:22:48.:22:55.

amazing group of people, give them the space to thrive and keep

:22:56.:22:57.

questioning. What other business

:22:58.:23:02.

stories has the media been Jeremy Stretch is joining

:23:03.:23:04.

us again to discuss. Good to see you. Let's begin with

:23:05.:23:17.

the story that we saw in the FT, it is an interview by the CEO of

:23:18.:23:23.

Netflix, the movie and TV streaming app platform. What did you make of

:23:24.:23:27.

the interview? It was quite telling insight into the man behind what has

:23:28.:23:30.

become a phenomenon. It really is a phenomenon because if you consider

:23:31.:23:34.

the humble origins of the company in terms of going back to how we use to

:23:35.:23:40.

watch films on television via external recording systems to now

:23:41.:23:45.

having an industry heavyweight creating its own content, that is a

:23:46.:23:48.

fascinating things because of course the company is very much driving the

:23:49.:23:53.

market, creating its own content and demanding that others follow through

:23:54.:23:58.

and in a sense it creates a changing business landscape because of course

:23:59.:24:02.

it is one of the driving forces behind the sky 20th Century Fox deal

:24:03.:24:06.

so it is a driver in the market. He gave an interesting insight into the

:24:07.:24:10.

culture of the organisation, saying that adequate performance wasn't

:24:11.:24:16.

enough, that result in some sort of severance package, he also touched

:24:17.:24:21.

on the fact that Netflix is a highly competitive arena competing with

:24:22.:24:25.

pretty much everyone and everything, including our sleep, and we put that

:24:26.:24:28.

out to view was this morning, whether our streaming viewing

:24:29.:24:31.

habits, because it is so mobile now that we can do it on our phone that

:24:32.:24:35.

night, is it getting in the way of our speed? That appears to be the

:24:36.:24:38.

case and psychologists would argue if you are looking at streaming

:24:39.:24:42.

devices late at night it will create blue light which disturbs your sleep

:24:43.:24:48.

patterns, creating a raft of other issues, psychological issues, so in

:24:49.:24:55.

a sense there is this mass of content we can see on all different

:24:56.:24:58.

platforms, not just a case of sitting in front of the television.

:24:59.:25:00.

As anybody on the underground knows, you will see people watching things

:25:01.:25:03.

they have downloaded, so there is this inexorable process of almost 24

:25:04.:25:09.

hours which is creating a compete with our sleep in certain cases. And

:25:10.:25:13.

the CEO, Reed Hastings, says it has been a dizzying ride but it is just

:25:14.:25:16.

at the beginning. Jeremy, do you have a unicorn in

:25:17.:25:21.

your basement? Not as far as I am aware! This is extraordinary, it is

:25:22.:25:28.

on the BBC News website, and man who built a ?1 billion computer firm in

:25:29.:25:31.

his basement, one of those entrepreneurial stories that people

:25:32.:25:36.

aspire to. And it is, it has taken a prolonged period and was clearly an

:25:37.:25:39.

enormous risk for this individual to decide to set up his own computer

:25:40.:25:45.

company in his basement, in a small city outside of Toronto which I have

:25:46.:25:49.

visited on a number of occasions and had no idea of this company so it is

:25:50.:25:53.

a story that is fascinating to me as well, but it underlines the fact

:25:54.:25:57.

that if you have an idea, in fact he did not have the idea until he

:25:58.:26:00.

started the process, but if you have an idea, you can create a business.

:26:01.:26:03.

Good to talk to you. We will see you soon, goodbye.

:26:04.:26:12.

Good morning, it has been muggy night across the south-east, fresher

:26:13.:26:17.

further north, over the coming days

:26:18.:26:18.