26/07/2017 BBC Business Live

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

After the disappointing growth outlook the UK received

from the IMF earlier this week, today we get some real numbers

Live from London, that's our top story on Wednesday, 26th July.

Economists predict UK growth will have picked up slightly -

as consumer spending comes under pressure from rising prices.

Also in the programme, Japan's Nintendo returns to profit,

thanks to bumper sales for its new Switch console.

Markets in Europe have opened. They are in the green. All eyes are on

the States where the Federal Reserve meet.

We'll be talking to one of Europe's largest online train ticket

retailers which is trying to break into some of Asia's biggest markets.

bland and boring, today we want to know, what's the best

In just under an hour, the UK will unveil its latest growth

numbers for the three months to the end of June.

Earlier this week the International Monetary Fund warned that weaker

economic activity means both the US and UK will expand more slowly

However, in the numbers due out this morning,

economists are expecting the UK's growth rate will have risen slightly

Following the Brexit vote, the pound fell.

This put pressure on prices and last month inflation stayed

above the Bank of England's 2% target rate.

And higher prices - partly from imported goods -

are having an impact on consumer spending.

Now according to Visa - household expenditure

fell 0.3% last month - the lowest figure

But government figures suggest uncertainty isn't

The UK continues to be the top investment location in Europe

with more than 2,200 new foreign direct investment projects

announced in the last year and that's 2% up on the year before.

And on Tuesday, BMW announced it had chosen Oxford

as the location of where it will build its new

Joseph Sternberg, Editorial-Page Editor

at the Wall Street Journal is with me.

Welcome to Business Live. Nice to see you. So if we get the growth

that they're expecting, it will be very much as tends to be the case in

the UK driven by consumers? Right. I think that one of the interesting

stories here is that coming into the Brexit referendum last year the

economy was already in a very healthy condition and very

resilient. So the fact that the growth is still positive even with

all the uncertainty surrounding Brexit is a good sign that that

resilience is working, but there are a lot of head winds, consumer

spending is taking the hit from the falling pound that should be causing

concern even if the numbers are in the black. The weak pound was,

especially after the Brexit vote, was said to be, what was going to

boost exporting which would give manufacturing a new lease of life

and that it would rebalance the UK's economy away from consumerism and

more to boost exports. We haven't really seen that happen. I think one

of the stories to arise from that and this is something you would hope

that policy makers would be paying attention to in Westminster as they

negotiate Brexit. The economy is more complicated than it used to be.

You know maybe price and the exchange rate is less important than

it once was. More focus on the quality and the productivity.

Joseph, if we get this 0.3% that many are expecting. It is an

increasing it will be something like the 16th or 18th quarter in a row

where we have seen an increase. Which sounds good, but if we put it

in context, this increase compared to the 0.6% increase that we were

seeing a year ago, it is not great for the UK, is it? Right. When you

look at the falling consumption worries about real income inflation

adjusted, wages are not keeping up. I think that there is a lot of

reason for concern. Concern about how investment will perform with the

uncertainty of the outcome of the Brexit process. We were saying that

some figures show that the UK is still open for business. Lots of

business investment. Is that somewhere where we should be look to

go seek comfort? Yes, I think that one of Britain's advantages has been

that it is so open to investment and it is a relatively liberal economy

compared to the rest of Europe. The Brexit challenge is to expand on

that benefit instead of assuming that the economy can just coast. OK.

Joseph, thank you very much. Let's take a look at some of

the other stories making the news. President Trump says Apple's chief

executive, Tim Cook, is committed to building three

plants in the US. Such an investment would help

the administration follow through on a big campaign promise,

reviving the country's When asked, Apple

declined to comment. Britain is hitting the brakes

on new petrol and diesel vehicles. The Government plans to ban

new cars and vans powered Government officials are expected

to unveil a $332 million fund to help cut down on pollution

to improve air quality. The reported move follows a similar

announcement earlier this month The South Korean car-maker Hyundai

has posted a 51% drop It blamed the poor performance

on a slowdown in US sales, Chinese consumers bought 64% less

Hyundai cars compared It's part of retaliation by Chinese

authorities who object to the installation of a new US

defence system known as THAAD. More stories updated throughout the

day on the Business Live page online. On there right now, VW a

dime letter face accusations of running a cartel. The two firms have

denied, that's Volkswagen and Daimler denied the allegations. This

plays into the diesel emissions scandal. You can read more about

that online. It's just announced a return

to profit on strong demand Give us the numbers. Well, Rachel

the company has managed to make about $115 million in the three

months between April and June and as you mentioned the company's

basically back in the black after losing money last year. It is still

nothing compared to its heyday though. About a decade ago when its

very popular wii console was turning consumers into gamers. The company

has been betting on this new console, Switch, which was launched

in March. In the first month the company managed to sell about three

million units worldwide which is about the same as its rival Xbox as

well as PlayStation 4 and the company hopes to sell ten million

more Switches in this financial year which analysts think is quite

conservative, but the company has been having production issues to

catch up with very strong demand. So, it's very good news for

Nintendo. Thanks for that. It was a good day for markets in

the States on Tuesday, with strong results from Caterpillar

and McDonald's boosting the S 500 The Nikkei is up 0.5%. The hang sang

up a third of a percent. Europe have opened up. We're in the green. Like

markets in the States, markets in Europe are waiting for the outcome

of the Federal Reserve's two day meeting. Investors will be looking

for more information on how the Fed plans to start reducing its balance

sheet. With that and more Michelle Fleury

has the details about what's ahead Well, some big tech names making big

waves this Wednesday. Investors will want to hear more

about Apple's US plans. That's after Donald Trump told

the Wall Street Journal that Tim Cook, the boss of the tech

giant, had committed to building three

manufacturing plants in America. And Facebook reports second-quarter

earnings after the market closed. Profits at the social media giant

are likely to get a boost from its fast growing mobile ad

business, but how Wall Street wants to know

what progress Mark Zuckerberg and company are making developing

new advertising features. Meanwhile, a day after General

Motors reported a drop in profits, Ford is due to publish its first set

of quarterly results that is since Jim Hackett

became Chief Executive and America's Central Bank wraps up

a two-day monetary policy meeting. No change though expected

to US interest rates. Joining us is Jeremy Cook,

Chief Economist, World First. We heard Michelle talking about the

Fed meeting. They are not expected to change the rate, but it is always

watched closely? We are watching the language that's coming out of the

Federal Reserve the more about the balance sheet, the $4.5 billion

worth of assets that are sat on the Federal Reserve balance sheet which

they bought as part of their quantitative easing plan. We will be

looking to see how they plan on reducing that and whether they give

any markers as to when that's going to happen. In the policy statement

which comes out at about 7pm British Summer Time tonight. So why are

investors interested in that? Explain to us how the way that they

choose to reduce the balance sheet could impact on the markets? While

the Federal Reserve raised interest rates three times in the past nine

months and people are saying we're starting to get to a point where the

US economy can be meaningfully creating growth and creating

inflation, ?4.5 trillion worth of mortgage assets were bought by the

Federal Reserve. The way they sell those back is very interesting for

economists and markets because we have to wonder who buys them? Who

feels ready to take the assets off the Federal Reserve and what that

means for growth in the global economy as well? You can't just

destroy them. You can't just say the Fed is going to let go of them, so

where does that money flow to is the really interesting thing? Keeping

the focus on the US, Facebook announcing it's quarter results.

Everyone's favourite app. So it seems in the sense of the growth

that they have enjoyed, quarter on quarter, on quarter. Something like

16 quarters and 1.2 billion users, not just of Facebook, but of their

messenger app, and they own whatsapp. The key thing that a lot

of people are talking about is they own Instagram and Instagram is

starting to become the tip of the sphere for Facebook in taking on

people like Snapchat, the instant stories and the use of filters and

stickers on, I don't do this, but some people, some do! Rumbles. But

it is all about how that advertising revenue is coming through from that.

Facebook Live is very interesting. Whether we start to see adverts as

part of Facebook Live moving forward. Google reported, Alphabet

reported at the beginning of the week. Ad revenues hit lower, hit by

the EU fine. Jeremy Cooke, you will be joining us at the end of the

programme to go through the papers. I will.

We'll be talking to one of Europe's largest online

train ticket retailers which is trying to break into some

You're with Business Live from BBC News.

The UK Government is set to announce today that new diesel and petrol

cars and vans will be banned in the UK from 2040 in a bid

The Government is also due to publish its court-mandated

It sounds like a huge move, but is it?

Let's get the answer from our business

How big a move is this then? Well, it is an admirable goal, but it is a

long way off and the car industry is already moving in that direction.

The chances are that within a few years, you won't see many pure

diesel and petrol cars on the road anyway. They will be hybrids and

electric because of emissions regulations being brought in

particularly in Europe which mean that car makers are having to invest

money in electrification technologies and if they are

investing that money they will want us to buy electric cars and they

will be trying to persuade us to buy them. So market forces will take us

in this direction. In order to have a complete ban on petrol and diesel

cars by 2040 a lot will need to change. Particularly charging

infrastructure. It won't be enough to have a few fast charging stations

up and down the M1, there need to be comprehensive charging

infrastructure, not just on main roads, but rural areas. You might

say particularly in rural areas so people can get around. That

infrastructure doesn't exist yet. It will need comprehensive investment.

The question is where does that money come from and who pays? We

have got a plan for that better infrastructure for charging electric

cars, but what other measures are on the table? There is 100 million for

charging electric cars which may not seem much, but there is an onus on

local authorities to develop their plans and Michael Gove said this

morning he would look at any plans drawn up by local areas for example

to introduce highly localised scrappage schemes. It was thought

there might be some national scrappage scheme for diesel cars

because they are seen as being the main source of the problem in terms

of air quality. That hasn't happened. The onus will be on local

authorities and they can get money for things like retro fitting buses.

Thank you very much for that. Plenty on the Business Live page. We

have a team of correspondents across the UK. There are three months left

to spend, save or donate your old ?1 coins and the cost of changing those

is costing small firms thousands and thousands of pounds.

Check your kids' piggy banks for those ?1 coins!

In just under an hour, the UK will unveil its latest growth

numbers for the three months to the end of June.

Economists are expecting the UK's growth rate will have

Let's take a look at how the markets are faring.

And now let's get the inside track on rail travel.

1.7 billion rail journeys were made in the UK in the past 12 months.

This is a record high, with passenger numbers

more than doubling over the last two decades.

Advance ticket journeys increased nearly 10% over the last year,

but sales of season tickets fell by 2.9%.

Trainline says it is the world's biggest independent

It operates across 24 countries, helping passengers

to find the quickest and most cost-effective routes.

Clare Gilmartin is chief executive at Trainline and joins us now.

Good to see you. Welcome to the programme. This move towards advance

tickets, E tickets, but still on some routes you can't do it, you

can't get the best bargains because they are still doing paper tickets.

URI. We have been on a mission to bring the world's rail into one

simple app and website. We operate across 24 different countries now

and our mission is to help people see all their options, all the

different prices for their journey, so they can get the best price and,

increasingly, to get mobile tickets to people so that they never have to

queue in a train station, because the net result of all that is people

take the train more. Will it ever happen? It sounds like a noble

ambition but no queues, completely ticketed? We've really got the bit

between our teeth on this. We started in 2014 in the UK when there

were hardly any mobile ticketed roots and today we are nearly 50%

and I hope by the end of next year, we're partnering with the industry,

the real companies on the Government so by the end of 2018, hopefully the

full rail network in the UK will be eat ticketed. You are operating

across Europe and make inroads into Asia. How do you collect up all

those train lines, as trains crossed different borders, legal rules on

cultural issues. What sort of challenges have you faced? It is

complex and we are the leading global player in this at the moment.

We have brought together nearly 90 different rail carriers into one

app. There are 35,000 train stations in Europe, competitive as airports,

so it is a complex job but we are making it easy for customers, easy

to find the best price for your journey, easy to get a mobile ticket

and increasingly we are using data to give people better real-time

travel information on their journey. The big push for the company, the

big untapped market, seems to be Asia. What are you doing to break

that? When I said 70% of rail still bought off-line, people queueing in

stations, that is a global number. Japan is a huge market, all off-line

today, all people queueing in train stations, so we are looking to early

next year start in Japan by selling train tickets. We have the Olympics

coming up in a few years. Today it is very hard for foreign travellers

to buy a train ticket in Japan and we wish to make that much easier but

we're also looking beyond that to the US. Before you came to Trainline

you were vice president at eBay. Did you see many comparisons between the

two countries where companies? To survive spent 15 years working in

companies that use technologies to make life a bit better. At Trainline

we are on a mission, we want to make train travel accessible to everybody

and make it easy, we want to take the hassle away, take the anxiety of

getting the best price away and make it simple, easy and transparent. As

a company, you are very reliant on tech talent and people with the

know-how and skills. What are you doing as an organisation to nurture

that and protect the tech talent of the future? We employ over 40

different nationalities and that's the lifeblood of any global

high-growth tech company. So we take recruitment, hiring and developing

our people really seriously. We host a whole load of tech events in our

offices. We have a very vibrant tech and creative culture. We have been

hiring a lot in technology and data science and it is exciting work for

people. It is bringing artificial intelligence to rail for the first

time, which tells customers in their journeys. Do you have a favourite

train journey? I love the journey along the $ to call more. It is

beautiful. -- along with Dawlish Coast to Cornwall.

Volkswagen will hold an emergency board meeting later today,

regarding allegations that the car-maker operated

a cartel alongside Audi, Porsche, Mercedes and BMW,

If true, the reports would be a further blow

to the German car industry, which is trying to recover after

Damien McGuinness reports from Berlin.

Volkswagen, BMW, Daimler, Audi, Porsche, all German car brands

accused of collusion. The allegation is that since the 1990s they

regularly held talks to agree costs, either for parts or for technology.

The aim was allegedly to block competition. All five car companies

deny the claims, all refused to comment, and it is possible that the

talks were legal, held simply to discuss how to standardise

technology across the industry. But the news has rattled investors. When

German media first published on the reports last Friday, VW shares fell

by 4.9%, while shares for BMW and Daimler dropped by more than three

percentage rock the European Commission and the German cartel

office have not yet launched an official probe but are looking into

the allegations. Folks like and Daimler have declined

to comment on the allegations. -- folks via and Daimler.

What other business stories has the media been

Jeremy Cook, Chief Economist, World First, is joining

One of the big stories the Financial Times Greece to raise euros of the

first bomb selfie years but let's not breathe a sigh of relief? Nobody

should be popping such champagne corks over this. This is an

incremental step awards Greece being back. We are talking about UK GDP

this morning, the Q1 GDP increase was positive, we're starting to see

green shoots of recovery, but when you look at the fundamentals of the

economy, still very poor, 180% jet to GDP ratio. Whilst this increases

the amount of debt that Greece eventually owes, it has been

financed at a lesser interest rate than most of the other debt that it

has. Its last bond issue was three years ago and was about 4.9%, this

is 4.5, 4.6. So incrementally getting a bit better. What is

interesting is this bond sale to Dublin was a kickback for some of

the people buying the bonds. A lot of people still hold Greek debt and

hold that previous debt which expires in 2019 so what has now

happened is that some holders of that debt, which was due to expire

in 2019, have been offered this new debt and if they took up this new

debt, which expires further in the future, they get a windfall back

from the Greek government, which equates in total to about 1400

euros. That kind of makes this return to the bond market not as

positive as it sounds? It is a financing issue. Is that a normal

thing that can happen? Companies will -- countries will try and

elongate the amount of time they have to pay until they have to pay

it back but this just seems to be a very, very short-term way of doing

it. The other element that is interesting is that with interest

rates that are persistently low, stubbornly low, investors are

perhaps turning to these countries that they may not have wanted to

touch in the past, where they can get a bit of a decent return.

Investors are not there for yield, they are there to make money. You

look at US Treasury debt or gilts in the UK, they are not getting the

return that they would want so they have to go to the countries which

are paying a bit more money but for an elevated amount of risk.

Argentina last month launched a 100 year bond. You give me your money

now, I will pay you back in 100 years and you will get a %. 8% as

previously used to happen and Argentina has a history of default

so would you put your money and it? Did you? No. Let's touch on this

story in the Times. Bland, dull and boring, they have teamed up,

Scotland, Australia and the United States, to try and boost tourist

numbers and draw attention. Hopefully a little village called

Snore can get involved does well and we can have a commonwealth of boring

cities. These are nice little village is getting together and

hopefully it can continue. Where did you recently holiday near? I was in

Tuscany with some friends and this was... The town we were near was

twinned with a place in Belgium called 76 -- called Silly. It made

me giggle. That it. Bland, dull and boring. Not us! More business news

throughout the day. Good morning. While eastern areas of

the UK start off on a relatively dry note, further west