14/08/2017 BBC Business Live

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

Japan reports its longest run of economic growth in a decade.

Live from London, that's our top story on Monday the 14th of August.

Japan records its sixth straight quarter of economic growth, fuelled

But could soaring debt and stubborn deflation derail the recovery?

Despite being banned in the country for years,

a photo-sharing app 'colourful Balloons' has popped

up on the mainland - but has no Facebook branding.

And a new week but old worries over tensions between North Korea

And with holiday season in full swing we'll speak to the founder

of one hotel online booking firm who's trying to cut

And as airline passenger arrests soar by 50%,

Today we want to know what are your flying bugbears?

Know surprisingly my biggest bugbear when a flying is the lack of legroom

-- no surprise, my biggest bugbear. We start with Japan,

which has just released its latest set of growth figures,

and there's good news for It recorded its longest economic

expansion in a decade. Japan beat expectations with growth

of 1% between April and June - that's the sixth straight

quarter of growth. The numbers are an encouraging

sign for the government but don't solve the country's

ongoing financial headaches. Japan's productivity per person

per hour stands at $23.45. That leaves it in 18th place

in the world, well behind the US on $33.41 and a host of others

including Canada, the UK and France. The country's debt has also

ballooned in recent years. At more than 250% of GDP it

has the largest debt to output ratio in the world,

by quite a comfortable margin. Long-term the country also faces

what's been described If current trends persist,

in less than 50 years nearly 40% of the population will be over

the age of 65. Sir David Warren, an associate

fellow of the Asia programme Do we take this to mean that the

combination of monetary easing and fiscal stimulus and structural

reforms is working? It is good news for Abenomics because it seems

to be working, this is the strongest growth for two years, the strongest

consumer spending for a couple of years and the longest continuous

growth for over a decade. You have to go back to the early 2000s and

their aggressive structural form of the Japanese economy to find

continuous growth like this, and this bears out the positive verdict

that the IMF were beginning to give on Abenomics a couple of months ago.

What about the long-term issues, taking the debt issue to begin with.

250% of GDP. Are they doing enough to sort that out? It is difficult

for the Japanese government. This is a massive debt overhang and they

need to sort this out, and they have controversially tried to begin the

process of putting up VAT and to concentrate on fiscal consolidation

and that is controversial at a time when they also trying to get

inflation into the economy and get up and prices up. It is difficult

for him -- and get wages up. The majority of the domestic debt is

domestic, they are borrowing from themselves rather than international

markets, the Japanese government won't want to lose their focus on

the longer term, but it will be a continuing problem for them. If that

seem to like a big problem to deal with, the ageing population is more

complex, because the risk that they face if the number of people aged 65

and over get close to 40%, you have people were lying on the state

pension system and fewer people proportionally paying into the

system. This is the biggest problem Japan has to face in the long-term,

they need to bring more women into the workforce and the government has

committed to do this. This means probably bringing more immigrants

into the country, Japan has a very selective policy when it comes to

immigration. But they are prepared to bite the bullet and bring workers

in from abroad and it means people working much longer. We are seeing a

growth in older workers working longer into what we think of as

pensionable age, but these demographics are a long-term issue

for the Japanese to address. Thanks for joining us.

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

The chief executive of Australia's largest bank is to retire following

Ian Narev has been head of Commonwealth Bank since 2011

but civil charges accuse the lender of breaching financing rules.

Those claims have wiped billions of dollars off

Narev is expected to step down in June next year.

After weeks of public disagreement, the UK's

Finance Minister Phillip Hammond and the country's Trade Secretary

Liam Fox have written a joint article for the Sunday Telegraph,

stating that Britain will need a transition deal when it

The pair say that any deal would be "time limited" and should not be

viewed as a "back door" to staying in the EU.

Bitcoin is hovering above the $4,000 mark after surging past

Bloomberg reports it has soared on growing optimism faster

transaction times will hasten the spread of the cryptocurrency.

Facebook is reported to have launched a photo-sharing app

According to the New York Times, the social media giant

which is banned in mainland China has launched an app called

It's thought to have been released through a local company

Let's find out more, Karishma Vaswani, our Asia business

They have launched it, no branding so there is no real connection with

Facebook, why was Facebook banned in the first place? As you know, the

social media websites in general in China have been banned because of

strict internet censorship rules and the tight control China places on

their citizens and what they can access, but there's been no

confirmation from about this story. But the New York Times and other

media reported that Facebook said this launch was something they

okayed. You know what this is, basically it is a photo sharing

website. In China Facebook is banned, like many other forms of

social media, including Twitter. This app which is called Colourful

Balloons feels a bit like Facebook it doesn't carry the Facebook name

or the logo. It was released in China by a company, but all the

Facebook spokesman has said is that they are interested in China and

they are spending time in understanding and learning more

about the company. You know that I use Facebook because we have shared

some funny in stories. It's Monday, the start

of a new trading week, but the same issue is what's

weighing on markets. Asian numbers down as those worries

remain over the war of words between the United States

and North Korea. That was enough to take the shine

off the better-than-expected The Dow Jones and the S 500

finished higher on Friday, but both had their second worst week

in 2017 last week - In Europe, markets remain pretty

quiet for the holidays - The same worries persist,

and no one is willing to call More on that in a moment,

but first let's head Stateside and Michelle has a look at what's

ahead on Wall Street Today. Geopolitical fears dominated

sentiment on Wall Street last week. Traders may find themselves busy

poring over the latest Retail sales figures, jobs data,

and the minutes from the most recent Fed meeting are all due out over

the coming days. On the corporate front,

keep an eye out for a host of high street names from The Gap,

Walmart, Home Depot and Target, all reporting their latest

earnings figures. On Wednesday, US, Mexican

and Canadian officials meet in Washington DC for the first

round of talks to renegotiate the North American Free Trade Agreement,

or "Nafta" for short. Investors will be watching that

for any signs of increased This Monday, Canadian Foreign

Minister Chrystia Freeland will testify to a

parliamentary committee. She is expected to discuss

the government's negotiating Justin Urquhart-Stewart is with us,

of Seven Investment Management. The nick a is down almost 1%,

shrugging off the rather dramatic improvement for the Japanese

economy. Yes, some very good figures for the Japanese economy, Abenomics

is beginning to work, but we have the issue of career and that will be

covering all markets at the moment -- the issue of Korea. The United

States just ignored it last week, though, and they just went up. We

will be waiting for the next stage of this, but the markets are at low

volatility, low volume, the middle of the summer, but this is when you

could get some volatility coming in and people need to be prepared. Is

it time to take some risk of an take some money off the table? -- and. We

spoke about this last week, people are maybe watching North Korea not

the market itself and this is where we could see a correction. You think

about the amount which has come back already, pretty small, but it would

take so little for a change. The fact that the United States are

heading for a debt ceiling again, they have not had a budget proved

and I can't get any -- they can't get any tax deals through, and then

you have North Korea, so the investors are being more defensive

and if people want to take some cash off the table, nothing wrong with

that, it is moments like this, you can take some profit and then you

can use the volatility to your advantage. You mentioned North Korea

and the stand-off between the United States and Pyongyang. The markets in

the United States were not that bothered about it last week. That is

right. It completely ignored it, and what they were looking at there was

the domestic figures which were not bad, and we had figures regarding

inflation and that was looking fairly docile, as well, and there

was one big issue which was the issue regarding interest rates. If

they aren't going to go up as much as before, that was better news for

the market and that overrode North Korea. Justin, thanks for joining

us. We will see you later to go through the newspapers.

Some is not over yet. Even if you have not been on your holiday, there

is time to go on one. After the break we will speak to the planner

of one hotel booking website who is hoping consumers will cut out the

middleman when it comes to booking their holiday.

You're with Business Live from BBC News.

British businesses have cut back on investment

plans as their confidence in the UK economy falters.

That's according to the Institute of Chartered Accountants.

Their study shows business confidence for the third quarter

fell back into negative territory, reversing the gains made

Richard Holt is their Economic Advisor.

Has this reversal in confidence come about since

Clearly this has happened against the background of the general

election which introduced a great deal of uncertainty. Probably not

the only reason. The other thing which happened was the Brexit

negotiations began and continued to be rather unpersuasive and that

worried companies, as well, there was also growing anxiety about the

possibility of interest rate rises and I think probably a combination

of those three together is what is behind this decline.

Back in June London's businesses were starting to feel more

optimistic, what has changed since then? It's those factors. It's the

uncertainty over the domestic political situation, hopefully now

resolved. Its concerns about what the Brexit deal will be when it will

take place, and people are starting to worry about interest rates. That

last thing is perhaps fading away but clearly the EU issue isn't going

to disappear for the next two or three years. Thank you.

On the website, Scottish salmon exports have reached record value of

?346 million in the first half of this year. That is 70% higher

compared to the same period last year. The industry saw 29,000 tonnes

of fresh salmon sold in the second period of this year alone. The

biggest market for them is the United States, while China is the

most significant buyer in Asia. Much more on the website.

You're watching Business Live - our top story.

Japan records its sixth straight quarter of economic growth, fuelled

But the world's third largest economy still faces financial

hurdles, like a ballooning debt pile and prolonged deflation.

A quick look at how markets are faring.

Now, many of you may be about to head off on holiday, if so,

there's a good chance that you may have used a third-party

In fact, a study by Cornell University suggests that

three-quarters of all hotel bookings were made through online

travel agents such as Expedia or Booking.com.

While this can be an efficient way to compare hotel

prices within a city, holiday-makers may lose out

on special offers granted to people booking directly with the hotel,

this could include perks like free-wifi or free online check-in.

And for hotel chains, third party booking websites remove

the ability to offer a customised experience which would otherwise

With us is Hotelchamp's chief executive officer

I see the benefit of the King with a hotel directly because you can get

some of those added perks. But if it's cheaper to do it through a

third party I'm probably going to do it through a third-party. You're

right about that. What we saw in the old days is that hoteliers sometimes

charge higher prices on their own website rather than on a booking

platform like Booking.com. Luckily we see a trend that hoteliers are

more aware that they should create a level playing field where prices are

the same. But still able to offer extra services or added value.

There's a trade-off. By putting yourself on a third-party site you

open yourself up to many more people who might not necessarily have heard

about you. If I put myself on Expedia or Booking.com to get a

bigger audience, but you say they don't really need to do that any

more, we are better at shopping around? You are definitely better

off shopping around. Hoteliers are very good at giving hospitality

within the hotel. But they've been struggling to bring the same

hospitality to their website, for example. This is where we come in.

We help hotels to give the same hospitality level to the website as

they do in the hotel. What we are trying to do is to bridge the gap

when it comes to information from the hotelier to their website

visitors. Quite often the hotelier can give you a better service if he

knows what you're up to, and he can give you that by having this

information. It's an interesting time to be going into the hotel

industry, because when I go away, I tend to look for hotels, but a lot

of my friends say they book through Airbnb. Is there still a robust

business model for hotels in the traditional sense? The hospitality

industry is growing tremendously. I think Airbnb is fulfilling a need

that people like to have another experience. Hospitality is all about

experience. What we see is that in the current model, where online has

such a dominant position, guests don't get the right experience nor

the right service level, letter in the value for money they would have

got if the middleman hadn't had such a dominant position that they

currently have. I can see the benefit of a hotel chain using your

site, they can speak to their customers directly, they know who

they are, what type of room they want, all those sorts of things. But

from a traveller 's point of view, what difference does it really make?

The convenience of a third-party site means you've suddenly got a

whole array of hotels to book from. Yes. There are maybe two things to

say to that. First of all, extensive research shows that most people do

look around on the booking platforms, but still the majority

goes directly to the hotel website for more information. The

interesting fact is 99% of those people will leave that website

without making a booking because they don't trust it or they don't

get the right information, or they believe they will get a better deal

elsewhere. HotelChamp is offering that to their guests and maybe even

offering them a better deal. The convenience of the booking platforms

looks great from a consumer perspective. Let's assume you go on

a trip for a weekend to Barcelona, maybe you paid ?200 for a two night

stay in a hotel. The current commission model, you easily pay

close to ?50 on that booking. This is what the hotelier pays the third.

Imagine what an experience or better deal be hotelier could give you if

this middleman didn't have such a dominant position. You make your

money from winds and the software? Exactly. Thank you for talking us

through it. -- you make your money from licensing the software.

70 years ago, Britain ended its rule over India

and the country was divided into two separate states.

Partition brought about the largest mass movement of people in history,

but what has become of the economies of Pakistan and India?

Since partition, India and Pakistan have taken different economic paths.

India's economy was bigger than Pakistan from the start, because of

the size of its population and because of the fact it inherited

financial and government institutions. Today, India's economy

is almost eight times bigger than its neighbours. But what's

interesting is that during the first 50 years, both nations saw similar

economic growth. The average income per person in Pakistan was higher

than in India during this period. But, since the start of the

21st-century, India's economy started to grow faster, widening the

gap. This is largely down to economic reforms in India in the

1990s when it opened its markets for foreign and private investments.

Today, India and Pakistan are the largest economies in South Asia.

Trade between the two countries is thriving and estimated to be close

to $5 billion. Experts say that if this trade was formalised, the total

bilateral trade between the two countries could touch $10 billion

every year. We picked up this story in the

papers, SnapChat who is in permanent decline because other companies are

stealing its business. When it came to the market it was really rather

expensive. Almost from day one it was cursed. We've seen the share

price go down and we can hear the mutterings from Facebook and others,

they can take away their meal any time they like. This is because the

scale of Facebook is absolute. It's something they like, a little

start-up, it's just the concept. It's not necessarily the

intellectual property but the idea of sticking a filter on a video. The

trouble is, anyone else coming in and doing that, Facebook can easily

copy that as well. This is going to be the strength of these large

operations, the same with Google. It will be difficult to come up against

them and protect yourself. This is the point when the regulators are

talking about getting involved, they have so much power they are

effectively Monopoly players. You almost go back to the American trust

system in the 19th century. You had these huge steel conglomerates that

had to be broken up, and oil companies as well. That's where you

saw these other American oil companies coming up. They become

almost ubiquitous, they are effectively running monopolies. It's

interesting to see that no one is breaking them up at the moment but

at some stage, yes, the law is going to catch up with them and say you're

operating as a monopoly. Do you SnapChat? No. I'm going to wait for

it to go bust! Thank you.