08/08/2017 BBC Business Live


08/08/2017

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Live from London, that's our top story.

:00:00.:00:09.

Corruption, Recessions and unemployment have dogged

:00:10.:00:23.

South Africa in recent years and today the man at the top

:00:24.:00:27.

President Zuma could be forced to go in a secret parliamentary vote.

:00:28.:00:31.

And money-laundering allegations that could lead to a theoretical

:00:32.:00:38.

fine of close to $800 billion have lead to the boss of

:00:39.:00:41.

Commonwealth Bank somewhat unsurprisingly losing his bonus.

:00:42.:00:49.

And markets in Europe have started their trading day. Slightly down on

:00:50.:00:52.

the day and we'll explain why. And we'll be getting

:00:53.:00:59.

the inside track on the surprisingly profitable world of babaysitting

:01:00.:01:02.

and the company that's trying to turn it from a job for students

:01:03.:01:04.

into a global business. We want to know today which app

:01:05.:01:15.

could you not live without? Let us know. Use the hashtag business live.

:01:16.:01:26.

President Zuma of South Africa faces a no confidence vote in parliament

:01:27.:01:39.

today and as it's being held in secret there's a real chance

:01:40.:01:42.

that he could be kicked out of office by the end of the day.

:01:43.:01:47.

Mr Zuma has survived no-confidence votes previously

:01:48.:01:53.

but this time the stakes, both political and economic,

:01:54.:01:57.

Mr Zuma has been under constant pressure over everything

:01:58.:02:03.

from corruption allegations to a controversial cabinet

:02:04.:02:06.

reshuffle that saw his widely respected finance minister,

:02:07.:02:09.

That prompted two of the world's leading credit rating agencies;

:02:10.:02:16.

Standard and Poor's and Fitch, to downgrade South Africa's credit

:02:17.:02:19.

worthiness to junk hugely increasing borrowing costs

:02:20.:02:22.

And in June South Africa once the continents largest economy fell

:02:23.:02:27.

And figures out yesterday show the country's unemployment rate

:02:28.:02:37.

remained unchanged at close to 28% in the second quarter.

:02:38.:02:43.

That's about 6.2 million people out of work.

:02:44.:02:48.

Dr Joachim Wehner is a South Africa expert

:02:49.:02:52.

Nice to see you. Welcome to the programme. Running through some of

:02:53.:03:06.

the background to this there. It's worth restating why South Africa is

:03:07.:03:09.

in this position. The economic picture looks pretty dire right now?

:03:10.:03:13.

That's true. And you have to see it in the context. For 20 years after

:03:14.:03:18.

the end of apartheid, South Africa worked extremely hard to establish a

:03:19.:03:26.

reputation for economic credibility and good economic management, for

:03:27.:03:34.

short periods the first Finance Minister who Jacob Z uma fired

:03:35.:03:41.

triggered the week in 2015 where South Africa went through three

:03:42.:03:45.

Finance Ministers when the space of a few short days. So Mr Zuma has put

:03:46.:03:51.

the credibility of South Africa at risk. How much of this can be blamed

:03:52.:03:56.

on President Zuma? There are some factors that are out of his hands,

:03:57.:04:01.

one can say, for example the drought. Successive droughts in

:04:02.:04:05.

South Africa, weak global demand for mining output for example, that is

:04:06.:04:10.

dampening prospects for the mining sector in South Africa. But the

:04:11.:04:15.

ratings agencies have emphasised what they see as a major problem is

:04:16.:04:21.

Mr Zuma's handling of the institutional framework for the

:04:22.:04:26.

economic system and that has done a huge amount of damage in undermining

:04:27.:04:29.

the credibility that so many Finance Ministers have worked hard over 20

:04:30.:04:34.

years to establish. And so the uncertainty that now comes from this

:04:35.:04:38.

vote, interesting that we heard over the weekend the vote will take place

:04:39.:04:42.

in secret, that could affect the outcome significantly? That's very

:04:43.:04:46.

true. It's probably the first time that there is a realistic chance

:04:47.:04:52.

this might go through, this vote. It's probably not the most likely

:04:53.:04:58.

outcome because the electoral system in South Africa is based on close

:04:59.:05:04.

list proportional representation, that means MP who is sit in

:05:05.:05:10.

Parliament, it's the African National Congress in particular. If

:05:11.:05:13.

we get this vote today and he's ousted from office, the question I

:05:14.:05:19.

suppose is who would replace them? Is there a willing candidate,

:05:20.:05:23.

certainly from an economic point of view someone who would restore

:05:24.:05:26.

credibility? I think you have put your finger on the right issue here.

:05:27.:05:30.

Getting rid of Mr Zuma is only the very first step and a few questions

:05:31.:05:34.

arise here - how long can he cling on to power? He's proven himself to

:05:35.:05:47.

be extremely intelligent so it wouldn't surprise me if he stays

:05:48.:05:52.

until 2019. The second question then arises who will replace him. There

:05:53.:05:59.

is a struggle in the ANC now. A camp Mr Zuma's tried to Foster, a

:06:00.:06:06.

successor, his former wife who would probably protect him once he leaves

:06:07.:06:14.

office, make sure he's not exposed to legal proceedings or a more

:06:15.:06:19.

reformer camp led by a current deputy President. Interesting times

:06:20.:06:29.

certainly as far as the implications are concerned. Dr Joachim, really

:06:30.:06:34.

good to see you, thank you very much.

:06:35.:06:36.

Let's take a look at some of the other stories making the news.

:06:37.:06:39.

The Google employee who wrote a memo critical of the firm's diversity

:06:40.:06:43.

initiatives has been fired from the company.

:06:44.:06:45.

A male software engineer argued the lack of women in top tech jobs

:06:46.:06:49.

was due to biological differences between men and women.

:06:50.:06:51.

Google's chief executive responded by saying the contents of the memo

:06:52.:06:54.

are fair to debate but some of what was written

:06:55.:06:57.

A Scottish comic book company has been bought

:06:58.:07:04.

It's the first ever acquisition by Netflix but they haven't said giw

:07:05.:07:10.

Millarworld is run by the Scottish writer

:07:11.:07:17.

The deal gives Netflix access to a host of new characters

:07:18.:07:22.

to develop films, TV series and children's shows.

:07:23.:07:27.

The worlds biggest hotel chain Marriott is going to team up

:07:28.:07:31.

with Alibaba to tap into the growing number of Chinese tourists.

:07:32.:07:35.

Marriott International says the joint venture will allow Chinese

:07:36.:07:39.

travellers to book rooms using Alibaba's travel website

:07:40.:07:42.

Australia's Commonwealth Bank has scrapped its bosses bonus

:07:43.:07:52.

for damaging the bank's reputation amid allegations it broke

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money-laundering and counter-terrorism financing laws...

:07:56.:07:57.

Hywel Griffith is in Sydney, Australia.

:07:58.:08:05.

Hywel, this could be a humongous fine. Tell us more about this story?

:08:06.:08:13.

Absolutely. Some of the numbers here are staggering. The bank is accused

:08:14.:08:19.

of over 53,000 breaches of anti-money laundering laws and each

:08:20.:08:25.

one of those could potentially carry a $14 million US Dollar fine. It's

:08:26.:08:30.

accused of not making proper checks on intelligent money depositing

:08:31.:08:33.

machines, the hole in the wall where you can put money in as well as take

:08:34.:08:37.

it out. Customers are able to put in up to 200 high value notes but the

:08:38.:08:41.

checks weren't being made, as they were meant to be, on the provenance

:08:42.:08:45.

on the where that money was going to, so the money could be

:08:46.:08:49.

transferred domestically or internationally without the checks

:08:50.:08:52.

being made. The bank argues it's down to a single coding error,

:08:53.:08:55.

saying they should only really face one fine. It's all going to be

:08:56.:09:00.

decided in a federal court of claw. What has already been decide suicide

:09:01.:09:03.

the bank's Chief Executive and board members are going to suffer

:09:04.:09:07.

somewhat. The Chief Executive losing his bonus for this year, as will the

:09:08.:09:12.

senior executives and the board members taking a cut in their pay.

:09:13.:09:17.

But potentially the cost could be much greater in future, some

:09:18.:09:20.

analysts predicting the whole decade of growth for the bank wiped out if

:09:21.:09:25.

they face the maximum fine. Sounds very, very costly indeed. For now,

:09:26.:09:33.

thank you very much. Let us show you how the day went in general in the

:09:34.:09:38.

Asian markets. Japan taking a breather from the ten-year highs it

:09:39.:09:42.

reached yesterday, whereas Hong Kong up nearly half a percent. That is

:09:43.:09:47.

the night before, the Dow still going up-and-up above 22,000, way

:09:48.:09:50.

above that now. It's quite interesting how that just doesn't

:09:51.:09:53.

seem to end, that run on the share markets in the United States. Let's

:09:54.:09:58.

move on to Europe very quickly. Lots of earnings coming out in Europe

:09:59.:10:03.

still. Note as busy as last week. Standard Life reporting a rise in

:10:04.:10:07.

profits, also we have ASOS talking about expansion in the US in

:10:08.:10:12.

Atlanta. Retail sales falling though in the UK, so a flat day, if not a

:10:13.:10:15.

downbeat day for Europe. And Michelle Fleury has

:10:16.:10:18.

the details about what's ahead Jane Foley will join us later and

:10:19.:10:37.

people will be tuning in to see what is said. Her message is likely to

:10:38.:10:42.

emphasise that whilst the economy may not be overheating, the recovery

:10:43.:10:46.

in the US is strong enough for it to consider another rate hike this

:10:47.:10:51.

year. But will incoming economic data reinforce that argument? Two

:10:52.:10:59.

pieces to watch this Tuesday is the case Schiller House Price index.

:11:00.:11:06.

Uber's search for a new CEO meanwhile continues, after the

:11:07.:11:13.

resignation of the CEO last week. There are a few in the running.

:11:14.:11:20.

Joining us is Jane Foley, Senior Currency Strategist, at Rabobank.

:11:21.:11:26.

Good morning, Jane. We picked this story up in Bloomberg. It's an

:11:27.:11:32.

interesting problem to have. Warren Buffett has too much money. Why is

:11:33.:11:36.

that news, we knew that already? ! But what is he going to do with it.

:11:37.:11:43.

This is a problem. This is a company that doesn't pay dividends. He is a

:11:44.:11:48.

pilot of cash. Cash doesn't earn much in terms of return. His problem

:11:49.:11:52.

is where to invest. There is a small pool of companies he'd be willing to

:11:53.:11:56.

consider. He's made the point that it would be much more fun if the

:11:57.:11:59.

phone were to ring and business propositions were to fall his way,

:12:00.:12:03.

but as it stands, there is some difficulty trying to know where to

:12:04.:12:08.

put all of that money. Lovely to have that problem. This graph shows

:12:09.:12:12.

how he's managed to rack up the money. 99.7 billion dollars at the

:12:13.:12:19.

end of the second quarter. He's got all these great businesses making

:12:20.:12:23.

money but he's notoriously picky? But you have to remember he's been

:12:24.:12:26.

doing this for the best part of 50 years so this is a long-standing

:12:27.:12:30.

investment but that is exactly right. He's very picky. Some

:12:31.:12:34.

companies he owns are really well-known ones, Apple is another

:12:35.:12:38.

one. He's been known to invest also in utilities. Texas and Rail Road

:12:39.:12:46.

are a couple of them. Very picky, relatively diverse in that sense but

:12:47.:12:51.

only a small amount of companies. We'll be back soon. Really

:12:52.:12:55.

interesting stories to discuss with you later. If you are a parent, stay

:12:56.:12:58.

with us. Intercontinental Hotels Group has

:12:59.:13:00.

just reported an 8% jump in half year operating profit and we've been

:13:01.:13:04.

speaking to their new boss. You're with Business

:13:05.:13:07.

Live from BBC News. Retailers experienced slowing sales

:13:08.:13:18.

last month as households reined in their spending amid mounting

:13:19.:13:22.

pressure on their finances. According to the latest figures

:13:23.:13:26.

from the British Retail Consortium and KPMG, sales grew by 0.9%

:13:27.:13:30.

in July, down from 1.1% Theo Leggett is in our

:13:31.:13:34.

Business Newsroom. They came from a strong set of

:13:35.:13:48.

figures last year so this year it's hard to keep up? Yes, last year was

:13:49.:13:52.

particularly strong. On the surface, these figures from this year don't

:13:53.:13:56.

actually look too bad. They are showing slow but steady growth

:13:57.:13:59.

throughout the year. What is worrying is, if you look beneath the

:14:00.:14:03.

surface because nearly all of the growth was accounted for by sales of

:14:04.:14:06.

food. In fact over the past three months taken as a whole, nonfood

:14:07.:14:10.

sales have declined and when it comes to food sales, it's not about

:14:11.:14:14.

more food being sold, it's about prices going up as well. That is

:14:15.:14:18.

accounting for the increase. The broad picture there is not so good.

:14:19.:14:24.

The BRC has a warning in all of this as well, saying that because real

:14:25.:14:28.

wages are declining, there is a smaller pool of consumer wealth out

:14:29.:14:32.

there to draw from and there's a lot of competition among retailers. That

:14:33.:14:36.

is where it gets political because the BRC says given the outlook for

:14:37.:14:39.

consumers is so tough, the Government needs to make sure it

:14:40.:14:43.

keeps tariff free trade with the EU as a priority in Brexit talks.

:14:44.:14:47.

Pretty much everybody is talking about what they want from Brexit

:14:48.:14:50.

talks at the moment but that is the BRC's take on it. Also the issue of

:14:51.:14:55.

online versus high street, bricks and clicks, you have got to be be

:14:56.:14:59.

successful if both in this environment where it's getting

:15:00.:15:02.

tougher in terms of people spending? Absolutely. That is what the best

:15:03.:15:07.

retailers are doing. Over the past month, in-store shopping and online

:15:08.:15:11.

retailing grew. If you look over the past three months, a slightly longer

:15:12.:15:17.

time frame, then in-store sales have declined and declined by a

:15:18.:15:20.

reasonable margin, whereas online sales have gone up by about 8% in

:15:21.:15:25.

the same period, so online sales still growing.

:15:26.:15:33.

For the rest of the business news, you can check out the web page. ASOS

:15:34.:15:47.

spending $40 million on a new warehouse in Atlanta.

:15:48.:15:56.

You're watching Business Live. Our top story:

:15:57.:15:59.

The South African President, Jacob Zuma,

:16:00.:16:00.

is facing one of the most testing episodes of his rule.

:16:01.:16:06.

The speaker of parliament has announced that a no confidence vote

:16:07.:16:10.

Pauline says, "I could live without them all, but Twitter keeps me

:16:11.:16:34.

posted on a variety of stuff." Another viewer says "BBC News."

:16:35.:16:39.

Another viewer says fit bit." What do you use the most? Twitter and the

:16:40.:16:45.

BBC News app, of course. I'm a weather app person, but then you

:16:46.:16:48.

have a dog and I have to walk regularly.

:16:49.:16:51.

We use apps to solve all sorts of day to day problems.

:16:52.:16:56.

Food delivery, taxi services and shopping.

:16:57.:16:57.

But would you trust an app to find someone to look after your children?

:16:58.:17:01.

Making sure children are looked after while you're working is a big

:17:02.:17:04.

One charity found that 75% of parents would assess

:17:05.:17:10.

their childcare before taking a new job or promotion.

:17:11.:17:14.

The same survey found 30% of parents say they feel burnt

:17:15.:17:17.

Some extra help can, of course, help with that.

:17:18.:17:23.

For many parents, the biggest issue can be finding

:17:24.:17:26.

Yoopies is a new start-up hoping to change all of this.

:17:27.:17:35.

It's a website which connects parents

:17:36.:17:37.

We have the boss with us. Benjamin thank you very much of thank you

:17:38.:17:45.

very much indeed for coming into Business Live. Tell us how this

:17:46.:17:48.

started. You're not a parent, are you? I'm not, but I have three

:17:49.:17:54.

sisters and when I finished my studies two of them had become a

:17:55.:17:57.

mother. I the couldn't have a proper dinner with them, there were always

:17:58.:18:00.

childcare issues. I realised they only had two choices. Either they

:18:01.:18:09.

rely on expensive agency or a local newspaper that was not trusted

:18:10.:18:13.

enough to find a great sitter so then I realised there was a huge

:18:14.:18:18.

opportunity to create a trustworthy environment for baby-sitting,

:18:19.:18:20.

childcare and home care services. Let's talk about that trust.

:18:21.:18:25.

Obviously the website then makes it easier to do verification checks,

:18:26.:18:29.

criminal record checks, how does that work? All the sitters are

:18:30.:18:36.

verified are DBS checked. We verify their ID and we use the power of

:18:37.:18:42.

online social media for our usersment people can link their

:18:43.:18:45.

Yoopies account to with their Facebook account and they can see

:18:46.:18:51.

that any friends or friends of friends who already have recommended

:18:52.:18:55.

a baby-sitter. So we check the word of mouth and we put it on the

:18:56.:18:59.

internet. This started in France. You've spread across a lot of

:19:00.:19:06.

Europe. You've bought a UK in the UK Find A Baby-sitter.com. Sour

:19:07.:19:10.

aexpanding here as well. It is a really, really crowded market, not

:19:11.:19:14.

just apps like yours, but many other Facebook pages or websites or online

:19:15.:19:17.

services that provide everything you need if you are a parent including

:19:18.:19:23.

baby-sitters. Sure, but we do provide a comprehensive service that

:19:24.:19:28.

goes from finding the perfect match to online booking and payment. We

:19:29.:19:31.

assist with all Government assistance. So basically you can

:19:32.:19:36.

find a perfect sitter within ten minutes. We only have five persons

:19:37.:19:40.

of our best sitters that are selected for emergency care and we

:19:41.:19:45.

provide all the rest. So the people can find trustworthy people easy.

:19:46.:19:50.

How do you make sure you get your money for your services provider? I

:19:51.:19:57.

jumped on your website this morning and I searched for a baby-sitter for

:19:58.:20:01.

me and gave it a test and a great baby-sitter was matched to me and I

:20:02.:20:05.

sent her a message and she is a mile away from my house, I can meet her

:20:06.:20:14.

for a coffee and decide what I want and I don't have to pay you. Most of

:20:15.:20:17.

the times usually you want to talk to a few of them and we are charge a

:20:18.:20:22.

monthly fee for people to actually get... I haven't met her yet. If we

:20:23.:20:27.

get on, I don't really need to pay you a fee, do I? You have to pay a

:20:28.:20:32.

fee at first to get unlimited contacts with our baby-sitters, our

:20:33.:20:35.

nannies on the website. So you will have to pay first ?30 and then you

:20:36.:20:42.

can actually meet with her and have great childcare for your kids. Not

:20:43.:20:48.

just about Its childcare. It will let you find other things. Your plan

:20:49.:20:52.

is to roll out into the workplace as well? Exactly. This is interesting.

:20:53.:20:56.

It might moon you could get food delivered to our desk and book a

:20:57.:21:01.

massage or get someone to take your dry cleaning and laundry. That's

:21:02.:21:04.

part of the challenge of the productivity. If we are all busy

:21:05.:21:08.

maybe being able to do that at the office? It is a difficult thing to

:21:09.:21:11.

improve your work-life balance when you are in the company, imagine your

:21:12.:21:16.

child is sick, you need to do a lot of things and companies need to

:21:17.:21:20.

attract and retain talent. So we provide the platforms for cans and

:21:21.:21:25.

for the employees in order to find great childcare and food delivery

:21:26.:21:30.

and everything in a one stop shop platform where they can find trust

:21:31.:21:34.

within the company because you can find a great profile that's been

:21:35.:21:37.

recommended by your co-worker. Sally is laughing because this is what I

:21:38.:21:42.

want! Ben is thinking, OK, I have my

:21:43.:21:49.

massage, they deliver my bacon sandwich to my desk. You're living

:21:50.:21:55.

in Havana! I have to talk to the BBC then for you! Thank you for your

:21:56.:21:56.

time. It is great to meet you today. Let's turn from booking babysitters

:21:57.:22:00.

to booking hotel rooms. The company behind brands

:22:01.:22:03.

including Crowne Plaza, Holiday Inn and InterContinental

:22:04.:22:04.

says operating profits were up 8% in the first

:22:05.:22:09.

half of this year. But the amount of money

:22:10.:22:12.

InterContinental Hotels Group makes per room,

:22:13.:22:15.

a really important measurement in the hotel business isn't

:22:16.:22:17.

growing as fast as it was. The new boss is Keith Parr and he's

:22:18.:22:19.

been telling me why. This industry grows two ways -

:22:20.:22:22.

by adding rooms and by growing RevPAR and so we saw a softer second

:22:23.:22:26.

quarter in RevPAR as did the rest of the industry principally driven

:22:27.:22:30.

by the United States. That's a lot it do with the shifting

:22:31.:22:32.

of the Easter holidays and also some slowlying in some

:22:33.:22:36.

of the oil markets. Additionally we have a big

:22:37.:22:38.

renovation programme going on in the US to add

:22:39.:22:39.

in new guest rooms and public space design for our Holiday and Express

:22:40.:22:43.

brand and that's been a bit of a headwind in the US,

:22:44.:22:46.

but we're seeing strength through our markets like Europe

:22:47.:22:48.

with RevPAR up over 6%. We saw RevPAR up in China,

:22:49.:22:50.

over 4% leading to revenue growth So on a global basis,

:22:51.:22:53.

we're seeing real strength It's what underpins our strong

:22:54.:22:57.

performance in terms He was at the company for 25 years

:22:58.:23:14.

and it was interesting to talk to him. I asked him what would you do

:23:15.:23:18.

if you are the boss and he is the boss and he had a very kind of slick

:23:19.:23:22.

answer, John Terry just keep the strategy." I was hoping for

:23:23.:23:27.

something really radical. You never get that on results day. That's why

:23:28.:23:35.

they have to do the Inside Track. Jane is here. This is a story we

:23:36.:23:41.

picked out of the Washington Post. China, not President Trump, is

:23:42.:23:44.

suddenly helping American steel. President Trump probably takes

:23:45.:23:47.

credit for it, but it is other factors at play. This is an

:23:48.:23:52.

interesting story. It does help correct the misconceptions that were

:23:53.:23:55.

out there since the Trump presidential campaign and

:23:56.:23:58.

particularly that very little of Chinese steel goes to the US. Trump

:23:59.:24:01.

was talking about China dumping steel in the US. This report says

:24:02.:24:05.

only 1% of US steel comes from China, but perhaps a big reason for

:24:06.:24:11.

this story is that China is shutting down some of its very dirty plants.

:24:12.:24:17.

They are producing less steel, but China is using up a lot of steel.

:24:18.:24:23.

China is the biggest consumer of commodities in the world. It absorbs

:24:24.:24:28.

iron ore and coal which make steel and it's doing a lot of

:24:29.:24:32.

construction. Making a lot of buildings, residential and roads and

:24:33.:24:35.

this is one of the ways it's doing it is taking up a lot of debt. But

:24:36.:24:40.

it's absorbing a lot of these materials itself. The front of

:24:41.:24:49.

today's Telegraph. British children must spend more time online so they

:24:50.:24:56.

can save the country says spy chief. He was perhaps making parents feel

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less guilty. It is all about balance. He said that maybe if we

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are a little bit behind in terms of our digital rivals and therefore,

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allowing children to explore the web more helps increase those skills

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which might be good use or good for the country in the longer term, but

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of course a lot of people said, no, no, it is the equivalent of jung

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food for China etcetera, etcetera. Jane, what app can you not live

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without? I like a bit of whatsapp. For me, it's the newspapers.

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Interesting. Thanks, Jane. Nice to see you. Dominic says, "Whatsapp.

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Staying in touch with friends and family." Yeah, I use that one a lot

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too. We will see you tomorrow. Bye-bye.

:25:44.:25:52.

Good morning. The unpleasant weather continues across England and Wales.

:25:53.:25:59.

This morning we have had heavy rainfall around. Throughout this

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afternoon further heavy showers

:26:03.:26:03.