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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