24/08/2017 BBC Business Live


24/08/2017

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Hello, this is Business Live from the BBC with Jimmy Robertson and Ben

:00:09.:00:16.

Thompson. Top talks or hot air? The world central bankers gather in

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Wyoming for their annual meeting, will the talks deliver any insight

:00:23.:00:26.

into the global economy. That is our top story on Thursday, the 24th of

:00:27.:00:28.

August. Will today's talks deliver any real

:00:29.:00:48.

progress in boosting the global economy? We will have the details on

:00:49.:00:54.

where, what why and who and if this matters? And wonder no more. China's

:00:55.:01:00.

global entertainment giant goes deeper into the red. We'll explain

:01:01.:01:06.

why. It's been a week of ups and downs for global markets. We will

:01:07.:01:09.

have an expert view on why any of this matters for all of us. And also

:01:10.:01:16.

coming up... This maybe little cheesy, but the interview will be

:01:17.:01:20.

great. We will get the inside track on growing demand for British

:01:21.:01:28.

cheese. Who writes these scripts? We want to know, what would you do if

:01:29.:01:34.

you won the Powerball. Let us know using the hashtag at BBC bids live.

:01:35.:01:44.

I know who writes these scripts, Jamie, it's the people laughing

:01:45.:01:51.

uncontrollably in our ears, Chris, Adrian and Jenny this morning! Good

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morning to you all. Jackson hole, Wyoming, population 9000 is normally

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known for its trout fishing, but today it hosts something different.

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The annual general meeting of central bankers from more than 40

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countries. The top billing goes to the host, US Fed chief Janet Yellen.

:02:12.:02:16.

What will investors be listening out for when she speaks? Top of the list

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will be the US policy on interest rates. There have been three rate

:02:21.:02:24.

rises since December. Markets will be watching to see if she offers any

:02:25.:02:29.

indication on her plans for future risers. She may lay out some plans

:02:30.:02:34.

to share the $4.5 trillion worth of bonds, Betts, to you and me, that

:02:35.:02:38.

the bank acquired as part of its aggressive money printing programme,

:02:39.:02:43.

trying to off-load some of those. Markets will be looking to see what

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European Central Bank President Mario druggie has to say. He is

:02:48.:02:51.

attending for the first time in three years. -- Mario drag you.

:02:52.:02:56.

There is an expectation that he may say something significant, but don't

:02:57.:02:59.

get your hopes up. The rush by Tel is with me from IMG bank. First,

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interest rates, are they going to say anything about that? Central

:03:06.:03:08.

bankers will be very careful about the words they use, given how

:03:09.:03:12.

sensitive financial markets have been two recent subtle policy since.

:03:13.:03:16.

There will be a lot of reading between the lines for us and lists

:03:17.:03:21.

to do, but those looking for any major policy announcements... They

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do it far ahead and give us lots of warning now. I'm not expecting

:03:27.:03:30.

anything major. There will be a lot of prep work, laying the foundations

:03:31.:03:35.

for policy changes. What about the pile of bombs sitting in a vault

:03:36.:03:39.

somewhere... I imagine it's probably not, it is electronic -- pile of

:03:40.:03:50.

bombs. Pile of bonds. Janet Yellen is ready to start the process of

:03:51.:03:54.

shrinking the balance sheet and unwinding some of them are produced

:03:55.:03:58.

by what effect does that have on the market? It hasn't had too much of an

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effect. One would have expected bond yields to be higher and equity

:04:03.:04:07.

prices to be of a bit. Maybe the perfect storm is coming soon, but

:04:08.:04:11.

maybe not. It will be so gradual, markets will back their eyelids.

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There is this issue about asset prices, a really interesting one. No

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information, prices are not going up, except on the stock market.

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Property prices are going up, everywhere else, no inflation. What

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does the Fed do in a situation like that? Central banks have been

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talking about the distributional effects of duty and how their

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policies are not set up to do that. We will be hearing about that -- of

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Q is. It is the short-term interest rates that have put up the prices

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begin at everybody has or money and they are all on the stock market.

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Partly, but there two views within the Fed. No interest rates are here

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to state. One other question on regulation -- low interest rates.

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There is a lot of talk in the White House about getting regulation of

:05:01.:05:03.

banks. Will the central bankers have anything to say about that? This

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meeting will be about fostering global economy. Central bankers will

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reiterate the need for regulation to safeguard future growth. I think

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that will be the message. I like it on that camera four, it looks like

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Janet is that at the desk with us! Let's take a look at some of the

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other stories. Uber said it took bookings worth $8.7 million, up 7%

:05:28.:05:37.

on last year. The total number of bookings was up 150%. But it is

:05:38.:05:41.

still losing money, but that figure is falling every quarter. The

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results, after an unprecedented series of scandals that have

:05:46.:05:51.

engulfed the company in 2017. People searching for, quote, depression,

:05:52.:05:54.

and Dougal, will soon be prompted to take a questionnaire to assess if

:05:55.:05:58.

they may be suffering from the illness. The search giant has

:05:59.:06:02.

partnered with the US national lines on mental illness to roll out the

:06:03.:06:06.

project, although it is currently only for US users. The UK food

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industry has warmed but the post-Brexit Labour shortage could

:06:11.:06:15.

leave a third of businesses and viable. The food and drink

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Federation said the sector faces a rapidly approaching workforce

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shortage and skills gap. Nearly half of all of the businesses it survey

:06:24.:06:28.

said that EU nationals working in the UK were considering leaving.

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We're going to talk about that as well with our inside track get a

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little later, he will is suffering from exactly that. Stay tuned for a

:06:36.:06:40.

discussion about what that means for the labour force here in the UK

:06:41.:06:45.

after Brexit. Away from the UK, though, shares in a Chinese hotel

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group plunged today after a disappointing result. Tell us about

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the story? Well, that's right, it is the Hong Kong unit of a huge Chinese

:06:59.:07:03.

development. It has fallen as much as 11% after reporting a first half

:07:04.:07:08.

loss of $30 million, although it has since recovered somewhat. It is down

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7.5% right now. It blamed its losses on smaller gains in investment

:07:15.:07:17.

properties and the impact of exchange rates on the company sale

:07:18.:07:21.

of a project in Madrid. The sale of this project was called the

:07:22.:07:27.

wonderment or development, for 272 million euros, it losses skyrocketed

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more than 700% from one year ago. We know the Chinese firm has been in

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the news quite a lot recently. It walked away from a planter by

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London's nine Elm Square just recently. -- from a plan to buy. It

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would buy $1 billion of assets for one. 'S -- for Wonda's projects. Of

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course, the first half profits cannot possibly be helpful. Bearing

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mind that the Hang Seng, when the stock trade was shut yesterday

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because of a hugely devastating typhoon. Thanks very much. More on

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that a little later, but interesting times as far as the business is

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concerned. Let's talk about shares. Tokyo stocks are down again on the

:08:22.:08:25.

back of the strong yen. Worries over President Trump is my's remarks over

:08:26.:08:32.

Nafta and Mexico. It has been a weird week is for us markets are

:08:33.:08:38.

concerned. Down on Monday, by Tuesday, flat yesterday. We have had

:08:39.:08:43.

earnings this week, but there is more uncertainty. No sign that

:08:44.:08:46.

progress has been made any time soon. President Trump threatening to

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shut down the US government. We will talk more about that in a moment.

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Also Nafta, the North American Free Trade Agreement. We will discuss

:08:55.:08:58.

that can get. I want to show you Europe, it is a slightly different

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picture. Although there was not much to get excited about from this

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speech from the of the European Central Bank. He was beating

:09:11.:09:12.

yesterday, and he is expected to speak at that conference as we have

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discussed. Here in the UK, we get the second reading of the

:09:16.:09:17.

second-quarter GDP, the first one just a few weeks ago, up 0.3%.

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Today's figure is seen as a more complete data, so we may get a big

:09:22.:09:26.

update, but don't expect any big changes. That 3% figure came as a

:09:27.:09:30.

bit of a surprise because unemployment is still falling in the

:09:31.:09:32.

UK and yet it hasn't really changed much for the wide economy just yet.

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More on all of that injustice item. Michelle has her assessment of the

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day ahead on Wall Street. The world's top central bankers meet

:09:39.:09:50.

and we will get results from Tiffany is. They will be following speeches

:09:51.:09:54.

from Janet Yellen as well as the side of the European Central Bank.

:09:55.:09:59.

They will be looking for any clues on monetary policy. Meanwhile, there

:10:00.:10:05.

is plenty to worry the markets. Trump's threat to shut down the

:10:06.:10:09.

government shook investors, this is the risk of America defaulting on

:10:10.:10:14.

its debts looms on the horizon. US Treasury Secretary Steven Mnuchin

:10:15.:10:16.

has said the government won't be able to pay all of its bills after

:10:17.:10:22.

September 29 and last the debt ceiling is raised. That is the limit

:10:23.:10:28.

on the amount the government can borrow. Credit ratings agency Fitch

:10:29.:10:33.

has warned that America's triple-A rating was at risk if the debt

:10:34.:10:36.

ceiling isn't raised in eight timely manner. Joining us is chief market

:10:37.:10:44.

analyst at CMC markets. This is extraordinary, give me my wall or I

:10:45.:10:47.

am going to close down the government. It seems to be upsetting

:10:48.:10:51.

the markets and it is making waves. Are you worried? I think he was

:10:52.:10:55.

talking to his support base, but with President Trump you have to

:10:56.:10:58.

understand that what you see is what you get. He came to power on the

:10:59.:11:02.

basis that he wanted to build this war, however ridiculous it may

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sound, and we have been here before with the US and the debt ceiling. We

:11:06.:11:11.

were here in 2011 and 2013. The question is, how far is President

:11:12.:11:15.

Trump going to push this? The Republicans have control of both

:11:16.:11:21.

Houses. This is manageable, unlike 2011 and 2013 when President Obama

:11:22.:11:25.

was president. But President Trump is under pressure at the moment from

:11:26.:11:29.

all sides, not only Democrats, but Republicans. There is a concern. He

:11:30.:11:32.

did it may suggest that maybe the what the US government needs is a

:11:33.:11:38.

government shutdown. Maybe he would do it. What does a shutdown look

:11:39.:11:42.

like? What would it mean? It basically means that all

:11:43.:11:46.

government-sponsored activities get suspended. Basically, government

:11:47.:11:49.

staff don't get paid. There is some way around it. They can potentially

:11:50.:11:55.

extend or defer certain operations. But ultimately it's not a good look

:11:56.:11:59.

for the world's number one economy, if you're not playing your stuff or

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you are laying off. On a temporary basis. -- if you are not paying your

:12:04.:12:09.

staff. WPP, the big advertising company, saying it is worried about,

:12:10.:12:14.

basically consumer spending or consumer appetite for advertising

:12:15.:12:18.

seems to have dampened down. Figures we have just had out this morning

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from the UK about Dixons cough on, it has a warning about profits. --

:12:25.:12:30.

Dixons cough on. You can read more on the BBC website. These things

:12:31.:12:35.

drawing together a bit about consumer confidence, consumer

:12:36.:12:38.

spending. They do a little bit. With Dixons, consumers are holding off

:12:39.:12:41.

from upgrading their new friends. When you look at the prices of these

:12:42.:12:47.

new phones that are coming out this year, it's a lot of money --

:12:48.:12:51.

upgrading their phones. The shape of the advertising market is changing

:12:52.:12:56.

as well. Part of that is the way we consume advertising, Google, pay per

:12:57.:13:00.

click, Amazon, Facebook, the way that advertising is pushed and we

:13:01.:13:04.

consume it is different. On television and streaming, nobody

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watches TV now with outbreaks. -- with outbreaks. Advertisers are

:13:12.:13:14.

having to adapt to a changing digital, you know, road map if you

:13:15.:13:19.

like. There is a concern about a wage squeeze, consumer squeeze.

:13:20.:13:25.

Obviously, WPP and Dixons' resolve this morning could be reflective of

:13:26.:13:28.

the timing and part of consumers, not just here in the UK but

:13:29.:13:32.

globally. Michael, stick around, because we will be talking to you

:13:33.:13:36.

later about the newspapers and what is going on in the world of print

:13:37.:13:40.

media. Thank you. Still to come... It maybe a little cheesy... We've

:13:41.:13:45.

said this one already! LAUGHTER

:13:46.:13:48.

It's worth saying again, because the interview will be great. We're going

:13:49.:13:52.

to get the inside track on the growing demand for British cheese,

:13:53.:13:56.

especially in the United States, when it usually comes out of a tube.

:13:57.:14:00.

There is nothing worse than repeating jokes! You with Business

:14:01.:14:01.

Live from BBC News. We're being told off for not writing

:14:02.:14:12.

our own jokes! Don't you worry, we've got some of the bike up our

:14:13.:14:16.

sleeves. The number of cars built in the UK last month rose by 80%, that

:14:17.:14:22.

according to the Society of motor Manufacturers and traders. But the

:14:23.:14:26.

number of cars made in the UK in the last seven months of the year fell

:14:27.:14:36.

16% to about 1 million. -- 1.6%. Sean, the numbers seem to be better

:14:37.:14:40.

this month, why have we got this rise? Yellow morning, both. The

:14:41.:14:44.

reason they have gone up in July is a few reasons. One is that we have

:14:45.:14:49.

got those new registrations coming in in September. That generally

:14:50.:14:52.

means there is a bit of a bump this time of year anyway. Compared to

:14:53.:14:56.

last year, you have got to be careful comparing July and August

:14:57.:14:59.

because you get various factory shutdowns and there has been more

:15:00.:15:09.

investment in July this year than last making things look rosier. The

:15:10.:15:11.

general trend for the year and expectations from the industry is

:15:12.:15:14.

that in the UK we will be making fewer cars and selling a lot fewer

:15:15.:15:16.

as well, which is really crucial. The selling issue is important, you

:15:17.:15:19.

touched on the exports, for out of five cars made on the UK sold

:15:20.:15:24.

overseas. That is where the demand has been coming from, traditionally.

:15:25.:15:28.

It has. The demand in the UK, I like a good pun, it has been fuelled by

:15:29.:15:33.

the car finance loan industry. The Bank of England said 85% of all new

:15:34.:15:40.

car purchases in the UK are driven by car finance deals. That was a pun

:15:41.:15:44.

I didn't mean, by the way! That is a bit of a concern for them, but not

:15:45.:15:47.

for the industry. They say it is regulated and they are happy with it

:15:48.:15:51.

as it stands, but it will be won to watch as we see any potential

:15:52.:15:55.

interest rate rises in the future, loans become more expensive, what

:15:56.:16:01.

will happen to car sales in the UK? Sean, before you go, favourite

:16:02.:16:05.

cheese? I'm a simple Cheddar man. Stay watching, we will talk about

:16:06.:16:07.

that next. More fallout from the story about

:16:08.:16:18.

carphone warehouse, who have had a profit warning. They are also saying

:16:19.:16:24.

that the mobile handset market may not recover this year. The chief

:16:25.:16:27.

executive said: We have seen an increased number people hold onto

:16:28.:16:32.

their phones for longer. While it is too early to say whether the trend

:16:33.:16:38.

will be reversed, we believe it is prudent to plan on the basis that

:16:39.:16:42.

overall demand will not correct itself.

:16:43.:16:52.

You're watching Business Life. Our top story: Those central bankers who

:16:53.:17:01.

are meeting in the United States. They will talk about all sorts of

:17:02.:17:08.

things - inflation, interest rates. All the challenges for the global

:17:09.:17:11.

economy. The big question is, will it make any difference or is it just

:17:12.:17:16.

a jolly meeting? Lets see how the markets have

:17:17.:17:19.

started in Europe. Looking reasonably healthy, despite that

:17:20.:17:22.

fall at Dixons. The pound against the dollar at

:17:23.:17:42.

?1.28. When should you go on a cheese diet?

:17:43.:17:49.

When you need to Cheddar a few pounds! Cheese sales are up. Britain

:17:50.:17:54.

is moving ahead as a cheese exporting nation. We sold $687.2

:17:55.:18:01.

million worth of the stuff last year. We produce 435,000 tonnes of

:18:02.:18:10.

cheese in the last year. The majority of that was Cheddar, by far

:18:11.:18:17.

the most popular British export, particularly to the United States.

:18:18.:18:23.

And not all Cheddar is the same. Most of this is a standard variety,

:18:24.:18:28.

though there are some producers who concentrate on traditional farmhouse

:18:29.:18:37.

cheddar. The king of those cheeses is Cave- mature cheddar. Who knew

:18:38.:18:41.

there were so many fascinating facts about cheese? Mike pulling joins us.

:18:42.:18:54.

It is specialist cheese, isn't it? Yes, farmhouse cheddar. A cave is an

:18:55.:19:03.

ideal situation. You have 100% humidity, 14 Celsius all year round.

:19:04.:19:10.

What does that do to the taste? Cheese always picks up the flavour

:19:11.:19:15.

of what ever is next to it, like an onion in the fridge. If we were to

:19:16.:19:21.

do a blind tasting, could you tell your cheese? In the old days, the

:19:22.:19:34.

graders could tell you which farm it came from. It is a really big

:19:35.:19:38.

business, and we were talking about sales to the United States being

:19:39.:19:42.

particularly strong - who is your competition? When I think of cheese

:19:43.:19:46.

in the United States, either it comes in a rectangle or from a tube.

:19:47.:19:53.

The French, they do a good job in America as well. The Americans like

:19:54.:20:01.

English cheese, but they also like French cheese. Do you have to pay

:20:02.:20:09.

tariffs on your cheese? Yes, it is something about ?1100 at -- 1100

:20:10.:20:18.

pounds per tonne. We have seen the dollar

:20:19.:20:27.

strengthening in the last 12 months, and that has helped us a lot. So

:20:28.:20:42.

that offsets any problems. If people particularly wanted English cheese,

:20:43.:20:46.

they would buy it. Do we need a free-trade deal with the United

:20:47.:20:50.

States, as far as you are concerned? For us, it has worked as it is. At

:20:51.:20:56.

the moment, it's fine. When we talk about that fall in the Valley of the

:20:57.:21:04.

pound, that makes it cheaper for you both but commodity prices are going

:21:05.:21:08.

up, milk being no exception. Does that mean a big increase in your? In

:21:09.:21:16.

July last year, it was around 20p, and it is 30p this year. So that is

:21:17.:21:21.

the rise in the milk price, which obviously for us, we have to get

:21:22.:21:26.

that out of the market. Another story that has come out today is a

:21:27.:21:31.

survey by the food and drink industry about the supply chain,

:21:32.:21:35.

saying there are something that 30% saying that if they lose EU labour

:21:36.:21:40.

in this country, they will go under and be unviable. Is that true for

:21:41.:21:45.

you? Our EU labour is important to us. Would you go wonder? I hope not!

:21:46.:21:56.

Unviable was the word they used. We employ about 90 people from around

:21:57.:22:00.

the world, mainly from Poland. Fantastic people to work with. We

:22:01.:22:04.

are having a problem getting workers into the factory. Are they leaving?

:22:05.:22:10.

Yes, some of them are giving back to Poland. And how easy is it to get

:22:11.:22:15.

people to replace them? Very difficult. We put adverts in this

:22:16.:22:20.

week. The basic wage will have to rise to get these people. You are

:22:21.:22:25.

putting out adverts but not getting a response? We get a response, but

:22:26.:22:31.

they are the kind of people who don't want to work in a cheese

:22:32.:22:38.

factory. But you find EU labour. I do paying them enough? In the long

:22:39.:22:43.

term, we will have to pay more. Which will push up prices are? Yes,

:22:44.:22:48.

then we have to get that out of the market. We have to go to a broad

:22:49.:22:52.

than the UK to get the price. Thank you for coming in.

:22:53.:22:58.

We will have a look through what is in the business pages in a minute,

:22:59.:23:02.

but here is a reminder of how to stay across all the business news at

:23:03.:23:03.

the BBC. We want to hear from you. Get

:23:04.:23:22.

involved on the BBC Business Like web page.

:23:23.:23:37.

-- Business Live. Michael is back with us to talk

:23:38.:23:48.

about what is happening in the newspapers. This is an interesting

:23:49.:23:53.

story in the FT this morning - more debate and indecision about Heathrow

:23:54.:23:56.

and whether Richard get that extra runway. The Leader of the

:23:57.:24:01.

Opposition, Jeremy Corbyn, expected to vote against the expansion of

:24:02.:24:07.

Heathrow. Why? Pollution, that is the bottom line. That was the

:24:08.:24:11.

concern I had when they voted it through - how do you get under the

:24:12.:24:18.

care quality regulations? The M25 is a car park already, let's face it.

:24:19.:24:25.

What is the difference between West London and South London? It is the

:24:26.:24:29.

density, given the concerns that there are about clean air in the

:24:30.:24:36.

London area, do you want to argue that? We do need more capacity in

:24:37.:24:40.

the south-east, but I don't think it needs to be yet Heathrow. There are

:24:41.:24:46.

good transport links to Gatwick. Ultimately, a decision has to be

:24:47.:24:49.

made and stuck to. We have been having this debate for ten years. I

:24:50.:24:53.

wonder if it will just go won four more years now. I think it will. It

:24:54.:24:59.

seems that the politicians are unable to make a decision unless it

:25:00.:25:08.

is a significant project like HS2. All the while, our foreign rivals,

:25:09.:25:15.

Amsterdam, Dubai, are stealing a lead on Heathrow because of this

:25:16.:25:20.

indecision. We need it more than ever. Specifically now, with Brexit,

:25:21.:25:26.

we need to attract that inward investment. This sort of

:25:27.:25:29.

prevarication basically sends a terrible message to the rest of the

:25:30.:25:33.

world that our politicians can't agree on anything. Thank you very

:25:34.:25:38.

much indeed. And thanks for your messages this

:25:39.:25:45.

morning. And questions about the Powerball, the $750 million. Caleb

:25:46.:25:55.

says: 'S investment and a holiday. Is we will see you soon. Goodbye.

:25:56.:26:08.

A very good morning to you. I'm sure many of you are trying to plan your

:26:09.:26:14.

bank holiday weekend, and the forecast looks mixed - a mixture of

:26:15.:26:19.

sunshine and showers, with the brighter and drier weather in the

:26:20.:26:23.

south, thanks to high

:26:24.:26:24.

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