19/07/2017 BBC Business Live


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This is Business Live from BBC News with Ben Bland and Rachel Horne.


Chinese and US officials meet for high-level economic talks.


But with President Trump considering tariffs on steel


Live from London, that's our top story on Wednesday, 19th July.


President Trump hopes the talks can tackle what he sees as an unfair


trading relationship as he seeks to boost the number


car-maker Daimler says it will recall three million


Mercedes-Benz cars to install a software fix.


Here is how the European markets look at the start of the trading


day. We will take a look at what moved the Asian markets and how the


American markets closed. Some of them at all-time highs.


Imagine a sports star and you're probably thinking of someone


at the peak of their physical fitness - not necessarily.


We're looking at the lucrative world of e-sports.


Today, as the UK Government bans businesses from imposing extra


charges for paying by card we want to know, when have you been


surprised by a surcharge and what was it for?


We begin with talks between China and the United States.


President Trump's 100-day deadline for boosting trade with China has


come and gone and officials from both countries are about to


meet in Washington to assess what's actually been achieved.


Mr Trump hopes the talks will tackle what he says is an unfair deal.


It all boils down to this - the US buys more from


Last year the deficit or imbalance in goods was $347


At their first meeting in April Presidents Trump and Xi


set-up trade talks which have already


Both have agreed to expand trade with China saying it would accept US


beef imports and will increase access for financial services.


While in return, the US will allow imports of cooked chicken.


But many issues are still unresolved.


China's factories churned out a record 73-million tonnes


US producers have accused China of flooding the market,


And it's prompted Trump to consider slapping tariffs on steel imports,


part of the administration's emphasis to increase products


Miranda Carr is a senior analyst at Haitong Securities.


Thank you for coming in. What do you expect to come out of today's


meeting? Well, in terms of moves, not a lot. These dialogues have been


set-up and they are a way of easing tensions. You get tensions building


up and up and up and then the dialogues smooth things over, but in


terms of an agreement then probably not on the table. Ben was explaining


there, there has been some opening up of the markets in the last 100


days of beef into America or beef into China and cooked chicken into


America, but really the commodity here that everybody is talking about


is steel. President Trump threatening to slap tariffs on


steel. I mean, if he is prepared to make that move, could that just


knock all the discussions out of the water? Well, it could. Things like


beef and chicken won't make much of a difference to the 347 billion


number, but with steel it has been, so China is exporting less steel,


one-third less steel than it did this time last year. So they have


cut back. They've cut back supply, domestically, and they're cutting


back on exports. So one of the key arguments that Trump, the Trump


administration, the Trump negotiating team has about the steel


flooding into the US, no longer holds so much water. It is similar


with the currency they accuse currency manipulator and then


actually the currency has been appreciating so they're going to


have to shift into some other moves and in terms of putting a quota on


steel, it seems unlikely. Another point of contention between


the two is China's relationship with North Korea. There had about lot of


hope on the Trump side of things that China would help up the


pressure and especially in light of the missile tests and yet we had a


tweet from Donald Trump saying so much for China helping us on that


front. So, the potential sticking point there? Yes, well, the US seems


to be using some of the political Taiwan was an issue about six months


ago and now North Korea, they are ratcheting up the tension on the


political side in order to try to get sort of and conflating it with


trade. This doesn't work quite so well. But in terms of, I mean, the


idea that you're going to get some easy resolution, I mean actually


with North Korea, what China is doing and South Korea taking a lead


there, just recently is probably going to make more of a difference


than the economic talks today. Miranda, thank you very much for


your time. Thank you. Let's take a look at some of


the other stories making the news: Daimler has unveiled plans


to cut vehicle emissions. It's recalling three million


Mercedes-Benz diesel cars, and installing a software fix


on the vehicles. Daimler has been under pressure


from police and prosecutors who are investigating the possible


manipulation of diesel The voluntary fix will cost


the company $250 million and will A supposed boycott of


United Airlines because of the poor treatment of passengers has had


little impact on the company's United revealed its first financial


statement that included the period after staff forcibly removed


a passenger from a plane. Profits of $818 million


for the second quarter is almost 40% higher than the same


period last year. The UK Government has cracked down


on surcharges issued by credit From January next year,


consumers will no longer be charged extra for using their cards,


though they can pass The Treasury estimated that in 2010


alone, consumers spent nearly The move is in line


with European Union rules. We have been looking on our Business


Live page and the in a few hours' time the BBC will reveal a list of


the people who are being paid more than ?150,000. That's maybe


$180,000. There will be 96 people on the list. But an interesting


question here. Should we know what everyone is being paid throughout


business? We have a company that's being interviewed on the BBC saying


at his firm everyone's salaries are transparent and he says it just


becomes the norm and when you come to asking for a pay rise or somebody


has been paid more than you, you know the facts and you can argue


your case. We have a story, censorship over whatsapp disruption


in China. Users of whatsapp raising concerns after disruptions in China.


The Chinese Government hasn't said if it is trying to sensor the


service, but neither has whatsapp suggested that there is a technical


problem. Hong Kong airline Cathay Pacific has


seen shares fall after releasing what the chief executive called


disappointing figures There you are, hello! Why was he so


disappointed by the results? Ben, today Cathay Pacific revealed the


trfk numbers and the CEO had comments that got investors


attention. Rupert Hogg took over the top job in May. He said that Cathay


Pacific's performance in the first-half of the year was


disappointing and its bottom line is under intense and increasing


pressure. He is giving heads up to investors that the numbers won't be


that pretty. This is largely drew to strong competition it's facing from


Middle Eastern airlines such as Emirates and Etihad. They are eating


into the business sector. Cathay Pacific reported its first annual


loss in eight years in 2016 and so Mr Hogg faces a really tough turn


around job at Cathay Pacific. In recent years it has been selling


tickets below cost to keep its planes full. So, now Mr Hogg is


going to under go a huge revamp at Cathay Pacific and hundreds of jobs


are expected to go by the end of the year.


Thank you very much. Optimism about China's economy


helped keep the Asian It also gave commodity


prices a boost. The dollar hovered near its lowest


level for several months with investors betting that any


further interest rate rises The US currency was still


smarting after the collapse of the Republicans' push to overhaul


healthcare dealt a blow to President Donald Trump's ability


to pass promised tax cuts The main European markets have


opened the day higher. Household goods giant


Reckitt Benckiser has confirmed a $4.2 billion deal to sell food


brands including French's mustard and Frank's hot sauces


to US group, McCormick. Shares in Reckitt,


the FTSE 100 listed firm, Interesting to see what


the pound does today. It fell yesterday against the dollar


and the euro key after an unexpected slip in inflation which


dropped to 2.6% in June, That slowdown is seen as easing


pressure on the Bank of England So far in Wednesday trading,


sterling is pretty flat against the dollar,


slightly up against the euro. And Michelle Fleury has


the details about what's ahead Well after Goldman Sachs dragged


down the Dow with it's disappointing fixed income trading performance all


eyes on on Morgan Stanley. The bank which reports second quarter results


this Wednesday is considered Goldman's arch rival in the bond


business. Any weakness in its trading results well they are likely


to be off set by growth in its wealth management division. Look out


for profit figures from American Express. There is a growing battle


with Apple and its expected to weigh on the results of chip maker. The


company warned in April that its profit could be hit as Apple had


decided to withhold royalty payments until legal dispute was resolved.


And should you want a change of pace from company earnings, I can't


imagine why, the US Commerce Department releases its report on


new residential construction in June. Housing stats are expected to


climb to an annual rate of 1.15 million in June, that's after they


tumbled in May. Joining us is Trevor Greetham,


Head of Multi Asset Thank you very much for coming in.


Let's start by talking about UK inflation. It caught people by


surprise yesterday. Remind us of the figures? The inflation rate dropped


from 2.9% to 2.6%, the target is 2%. Both the numbers are above target


and people are looking at the fact that inflation has dropped and


asking themselves is that as high. We think because of the impact of


the sterling weakness after the Brexit vote we will continue to see


inflation pick up probably until about October. So what do you think


caused this blip? You think it is a blip? There is all sorts of things


going up and down in the inflation basket. It is a blip. I wouldn't be


surprised to see inflation more than 3% by October, but will this make


the Bank of England raise interest rates? Well, it is interesting and


it is a global phenomenon the employment rate in the UK is very


low. It is the lowest since the 1970s, but real wage income is the


lowest in 150 years and that's the financial crisis and that's also the


negative impact on real wages of the Brexit vote and the pound going


down. The other global phenomenon is stock markets giding heights. We saw


another record close on Wall Street yesterday. What's going on? How long


can it last, do you think? Well, we have had an eight bull market so far


since the 2009 low, the American stock market is up 260% over that


period, but mull markets don't die of all old age. What kills off a


market like this is inflation and it is wage inflation, when you get a


lot of wage inflation coming through the system, the central banks will


say the economy is too strong and the unemployment rate is to low and


they will raise interest rates. Central Bankers jobs is to take the


punch bowl away from the party just as things get going and on the wages


front, it is not a party. So we have got low interest rates. If China


remains relatively stable and commodity prices keep drifting


lower, this bull market could last longer. If China surges, and we get


more rises in commodity price it starts to fuel the risk of interest


rate. It is steady as she goes for China the markets would like to see.


Trevor, tauch. You're coming back to go through the papers later. Bring a


punch bowl if you can find one! Imagine a sports star and you're


probably thinking of someone at the peak of their


physical fitness. Not necessarily - we're


looking at the lucrative You're with Business


Live from BBC News. People who live in the South East


are better off than people But the gap between the richest


and poorest has narrowed since the recession of 2007/2008


according to a new Andrew Walker is in our


business newsroom. What does the report say happened to


average incomes in the aftermath of the financial crisis? Going back to


just before the crisis and recession really hit in a twist, we have seen


average growth of 3.7% which the IFS describes as being extremely slow.


That makes down a bit into better performances for pensioners


households and that reflects the triple-lock recently. And weaker


performance for people in work on average. We know that is likely to


persist beyond the data reflected in this report. Because we are now in a


situation where real terms average earnings are declining, wages going


up more slowly than prices. Some other striking things, the report


says there has been little change in the level of Apsley poverty over


this period. It describes it has been historically unusual. Also a


striking fact that low income tends to be more persistent than it used


to be. Following composers, people experience sharp changes in income


from year to year. What we're seeing in this report is more recently, a


tendency for that problem to be more persistent. What about inequality,


how is that changed? We have a grasp from the IFS report. We are clearly


in a situation here, this is the national figures, inequality


substantially more than it was if we go back to the early 1980s. But it


has come down from the period just before the great recession. The


really big decline of course has been here in London. That partly


reflects the strength of the labour market. Although incomes are low,


people with jobs, we have low levels of unemployment and that brings


these inequality figures down. Thank you, Andrew.


A lot of great stories, including this one from TalkTalk describing


good growth. Our top story - trade talks


between the US and China kick off in Washington today -


with President Trump hoping they will be able


to tackle what he sees A quick look at how


markets are faring. And now let's get the


inside track on eSports. The word "athlete" may conjure up


images of broad shoulders, and people in the peak physical


fitness. the idea of sporting stardom


is being turned upside down. Professional esports players may not


make as much as Cristiano Ronaldo, but one of the most successful


gamers has bagged nearly $370,000 in prize


money over the course Not bad, but it doesn't stop there -


some of the world's biggest sports teams are now paying gamers


to represent them All of this helps develop


the company's brand and enhance the reputation of eSports


as a whole. Video games are big


business here in the UK. In 2016, the gaming industry raked


in some $3.8 billion - this compares to just $1.4 billion


for the music industry. Fnatic is one of the world's


biggest eSports teams- we're joined by its co-founder Sam


Mathews. Can you explain what esports are? If


you think of sports in general, it is a game you play with the ball, in


a net or over a net and ultimately, esports, it's the same thing. You


can play it, it's a game, but it is available anywhere. All you need is


a device and an interconnection and you can compete. We're talking about


big tournament is happening in major stadiums where there are players on


the pitch as the football players may be but they are gamers with the


hand-held devices and people are filling the stadium is watching them


play. Yes, last weekend, there was one in cologne, there was one in


Cracow, last year, we sold out Wembley Arena faster than the Foo


Fighters. It is a global thing, not just a UK or American sporting, it


is over Asia, it spans the globe. You started a company in 2004. What


is nice about it, you said, most parents will say to the kids, stop


playing the computer game but your mum was completely behind you. I


have an amazing mother. She really got involved. I was 19 at the time,


I sold my car, it was like, what are you doing? I'd better make sure you


don't go into this and lose your money. She was in it for ten years


and she was instrumental in growing our business. You decided to set up


your team so you are a bit like a football manager or an F1 person


running the team. How many members of your team do you have and what


you love for when choosing members? Right now, we are in about eight


different games with about 45 players. We have a team in Kuala


Lumpur for example. We have been in 21 different games in the time we


have been growing this thing. It's a lot different real sport because you


are either in a basketball team or a baseball team and we have this


opportunity to be a brand, we make clothing and make hardware,


headphones as well. We look people but a focus, good at this and


professional. When it comes to looking after your team members, is


there any sort of regulation in this environment? Looking at other major


sports, it is about regulation, good governance, regulating bodies. It is


a little different because each game is kind of its own sport. There is a


regulation in different varying levels per game. However, going


forward, there's going to be the more government intervention I


guess. At the moment, it's quite a free market and its working quite


well. We don't want to repeat any mistakes traditional sports might


have made in the past. You would be open for more regulation? As long as


it made things better. Where do you see your company going? Do you think


it could become as mainstream as some of the sports we talk about,


football, tennis? I think esports are the future of sport. I think at


the moment, the lack of physicality, people think, these guys are just


sitting on their chairs. Virtual reality will change that.


Potentially, you will be watching the real world hunger games but


instead of being in a room like this, it might be on the moon of a


planet. Do you think you will get Olympic status? I think it is


inevitable. 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. We will keep you up-to-date with all


of the latest details with insight and analysis from our team of


editors around the world. We want to hear from you. Get involved on the


BBC Business Live web page and the BBC website. You can find us on


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


to know. Joining us again is Trevor Greetham,


Head of Multi Asset UK Government to ban companies from


adding a surcharge when you try and pay by credit card. Talk this


through what they are saying about it? When you are online buying


tickets or trying to buy clothing and you get to the checkout and it


says how would you like to pay and it says debit card, credit card,


brackets, plus ?2 50, plus ?1 50. That is to be banned in the UK from


the 1st of January. So you won't have that surprise last-minute


charge. Retailers and taxi drivers do the same thing sometimes.


Charging extra for credit cards as they get charged. For processing


credit cards. They will need to recoup the cost somehow. You will


find that you won't get that brackets plus ?2 but prices will


drift higher. These protections do happen in Australia and the state of


New York, you're not allowed to add this charge, but Japan, Canada and


New Zealand, you can. A lot of consumer group saying, it is about


time. It is a hidden way of getting extra income. When you go to the


airport and you have a no commission exchange rate company and it spreads


massively wide, you will get charged somewhere for that. We have been


asking from when you have had some unexpected surcharge when paying by


card. Darren says, what about booking fees? I booked tickets for a


show and had to pay ?8 and booking fees. Steve raffle ticket for ?2 and


the surcharge was five-time because apparently was gambling. Someone


else says 20 years ago, I got surcharged ?12 in a top London hotel


for just sitting in the lounge, I ordered a pot of tea and a


strawberry tart. Shocking! We have a story here, briefly, on the BBC web


page, an Audi car advert which has been criticised in China. Yesterday


we talked about new standards being brought into the UK to stop gender


specific advertising. This is an Audi advert showing a mother-in-law


inspecting the nose, ears and teeth of a prospective bride the siege is


appropriate for her son. As she was buying a horse or something. A bit


old school. Maybe a bit of a black mark for Audi. Maybe the one people


to talk about it.


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