07/09/2017 BBC Business Live


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This is Business Live from BBC News with Sally Bundock


The European Central Bank has everyone's attention today as it


grapples with the soaring euro and the future


Live from London, that's our top story today,


A big headache for the ECB boss, Mario Draghi. When to wind down the


massive stimulus programme? There are fears the $2.4 trillion package


which propped up the eurozone could be creating a bubble. And tempering


Trump's rhetoric against North Korea. Are they watering down trade


sanctions against Pyongyang? We will get the view from Asia and this is


the situation in the markets in Europe as they open on the up. A lot


of investors waiting for that key decision from the ECB.


from a South African entrepreneur known for his passion for democratic


technology and a spell on the International Space Station.


So today we are asking what are your astro ambitions?


If you were given the chance to go to the International Space Station,


We start in Frankfurt where in a few hours' time


the European Central Bank holds its latest policy meeting.


The big question - when will it begin to raise interest


rates from their historic lows and start unwinding the massive


economic stimulus programme that's been in place


The eurozone economy is in much better shape,


growing at just over 2 percent a year.


And the recovery is broad, including weaker nations such


So called core inflation - which strips out volatile elements


like fuel and food - hit 1.2 percent last month.


The overall rate was 1.5 but that's still below


And the recovery's partly down to this -


pumped into the economy through quantitative easing.


In other words, creating new money and using it to buy up bonds.


Critics argue this flood of money is creating a bubble on stock


Others warn scaling it back too quickly could plunge


Europe's recovery has also caused this.


A surge in the Euro, which is up almost 13 percent


Tightening monetary policy could boost the currency even further.


Philippe Legrain is a former economic adviser to the President


of the European Commission, from the London School of Economics.


So that is Mario Draghi's dilemma. What are you expecting from today,


if anything? As she rightly said, the big question is when and how the


ECB winds down its bond purchases. I think it is unlikely to start doing


so today. First of all because, as she pointed out, the economic


situation has improved, but inflation is still low, way of the


target. And secondly because the ECB has not prepared markets for this


move, and if it acted without preparing markets, you would see a


big sell-off which could cause it to reverse. Will he give some heavy


hints in the press conference about when tapering or scaling back of


quantitative easing will begin? I imagine Mario Draghi will be hinting


at the way forward. He has already spoken about the fears of deflation


being over and out that being a question about reflation. The next


ECB meeting is on the 26th of October and that is probably the


time we will see an announcement about what the plans for bond buying


our next year, when they might be wound down, and at what pace.


Although as I pointed out, the economy across the eurozone is


growing again, much more positive numbers, and there is growth in


Greece, still be economies are very vastly different. Germany could


withstand this rollback of quantitative easing. Of course. It


is different across the eurozone and there is a lot of slack in economy.


The growth figures for the first half of this year are good, but if


you look at the context over past decade, actually eurozone living


standards are no higher than they were a decade ago, and therefore


there is plenty of scope for the economy to carry on growing without


wages taking off, and therefore without inflation taking off, so


people will say we need to stay our hand on that. There is also the fear


that if we act pre-emptively, firstly we could see the Euro


strengthening, which would depress inflation, and secondly we could see


a sell-off of government bonds, notably in Italy, which has a huge


public debt, which has elections due before next May, where that could


have disastrous financial and political consequences. We are


running out of time, but you mentioned the elections and events


in Italy. We have also got the German election coming up in a few


weeks and we have got Brexit. All of that context in which Mario Draghi


has got to walk the tightrope. Very difficult. Sure. German elections


and there has always been pressure in Germany, where they don't like


quantitative easing, and there economy is doing well and there is


pressure from them and their allies to wind down sooner rather than


later. Thank you for your time. We are going to be all over this, so


when we get any newsman ECB and that press conference that follows after


them on a trip to the announcement, we will let you know what is going


on. -- the monetary CNN announcements.


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


President Trump has agreed to a Democratic plan to lift the US


debt limit for three months, to fund the government and rush aid


The president went against Republican leaders who wanted


to extend a debt-limit increase for longer until after the 2018


mid-term elections to avoid giving Democrats leverage.


The US has asked the UN to place an oil embargo on North Korea


and freeze the assets of leader Kim Jong-Un over its


The draft Security Council resolution seen by news agencies


demands not only a ban on oil and gas supplies, but also


Facebook says it has discovered a Russian-funded campaign to promote


divisive social and political messages on its network.


The company said $100,000 was spent on about 3000 ads


over a two-year period, ending in May 2017.


The ads did not back any political figures specifically,


but instead posted on topics including immigration,


We promised you coverage throughout the day and it is already on the


Business Live page. All eyes on ECB of course at the Euro will be very


sensitive today. If it is important to you, keep an eye on the pound


sterling as well as the day progresses. Other stories out there


for the UK economy, including this one about Bovis's performance being


expected, it is on track. And also the UK financial watchdog has closed


its investigation into the insurance firm Police Mutual. Lots of stories


on the Business Live page which we can't squeeze into this programme.


You can see them there. Despite the tough talk,


the White House could be quietly shelving its plans to cancel a free


trade deal with South Korea. It comes as tensions heighten


with North Korea as the UN Our Asia business editor Karishma


Vaswani is in Singapore. Nice to see you. What more can you


tell us? Sally, reports suggest that US President Trump has decided for


now at least to put off the cancellation of the trade deal


between Washington and Seoul. There were tweets coming out early in the


week and comments from the White House that the trade deficit between


South Korea and the United States was at a level which was not


acceptable to Washington. These are unconfirmed reports coming out now.


Only one media outlets reporting so far so we cannot categorically say


this is true. It would make sense, Sally, given the timing of what has


been going on between the United States and North Korea. President


Trump really need the help of South Korea to help resolve the North


Korean crisis so it would make sense if this ends up becoming true. Thank


you. Let's check in with


the financial markets now. stocks moved higher,


pulling away from the previous session's lows after news


of an agreement in Washington to raise the US debt limit helped


restore investors' appetite That deal between Republicans


and Democrats also pushed a look at how European


stocks have opened. On the up. Traders will be eyeing


the results of that key ECB policy meeting later. Now what is ahead on


Wall Street today? Stanley Fischer, the Vice Chair


of the Federal Reserve, A veteran central banker


who helped set the course of modern monetary policy,


Mr Fischer plans to leave The US Central Bank confirmed that


his last day would be October 13th, eight months before his term


was due to expire. Now, it leaves the seven-person


board of governors with as few The Senate Banking Committee


is scheduled to vote later this Thursday on the White House's


nominee, Randal Quarles, to the role Also, watch out for more market


reaction as investors track Meanwhile, traders believe the risk


of a US default have decreased, but they haven't disappeared


entirely. This, of course, after Donald Trump


and top Democrats backed a plan to raise the government's borrowing


limit for just three months. This was part of a broader package


to provide aid for Hurricane Harvey Michelle highlighting the big


stories in the United States. Jane Foley is senior currency


strategist at Rabobank. Talking there about the news of


Stanley Fischer resigning, going sooner than expected. He was


expected to finish his term last year -- next year. He said in his


personal letter that it was personal reasons but we have no more clues.


We do know that there is a difference of opinion between him


and Donald Trump on regulation. After the financial crisis there was


a big move to stop the crisis happening again. The Trump


administration is about getting back some of that regulation. Many


bankers including Stanley Fischer are quite vocal and have been


opposed to this. That is interesting because of the head of the Fed


saying we should not wind back that regulation and her term is coming up


in February. Yes, his own -- hers is ending early next year. She has


other common ground with Donald Trump, meaning she likes interest


rates to be lower for longer. Donald Trump likes the dollar to be weak,


which it is right now, and that might impact on things with Donald


Trump. We have got to fill Stanley Fischer's seat and there are three


other vacancies as well. So there could be a lot going on. Seven


seats. Yes, and he could get control. Your thoughts on the ECB.


Will you be across the Euro and the pound this lunchtime? Yes, the


markets are really watching this event. The ECB does not talk about


the currency specifically. How will he talk it down without talking


about it specifically? It's very clever Andy is a market man and he


knows how to manipulate markets and he might indicate not necessarily


the level but the pace, to try and keep a lid on things. If he doesn't


say anything, it is a green light for it to go up. Thank you. And he


will be coming back with this great story about disrupters in the tech


sector going into traditional banking. And from software to space,


we are also going to be talking about another disrupter, but that is


to do with IT. Mark Shuttleworth will talk


about being a tech disruptor You're with Business


Live from BBC News. Let's talk music. We have it all in


the show today. Space, music, money, everything!


Britain's music industry continues its strong performance


Trade body the BPI says exports were up 11% and 1 in 8 albums bought


Thank you very much for coming on the programme. Which artists in


particular are boosting sales? In 2016, it will not surprise you to


hear, Coldplay, the Rolling Stones, Adele and for very sad reasons David


Bowie. Because of his death, his catalogue around the world prompted


massive demand and interest. This year we are seeing Sam Smith has a


new album out and Ed Sheeran's album has been selling massively globally.


That will be reflected in the figures that we announce at the end


of this year. It is just looking very strong for music exports from


the UK. Is it really looking strong or is it a one off? We had the


tragic death of David Bowie and when it comes to Adele, she relaunched


itself with the first album for quite some years.


We have been seeing constant and steady growth. Since 2000, four .4


billion in exports generated in the world around record labels. The


growth was as a Levenson. This is part of a regular pattern that has


been developing over a number of years. Streaming has been growing.


That has been helping us promote our artists around the world. About a


quarter of their revenues are reinvested. Government has been


helping us as well. They had agreed scheme which has made ?2.2 million


available to support 150 artists, to market themselves all around the


world. This is part of a concerted effort to grow our profile


worldwide, to market ourselves and has helped to make the British music


industry incredibly successful. Apart from the US, we are the


largest exporter of music all around the world. It certainly sounds


exciting for the music industry in the UK. Gennaro Castaldo, thank you


very much indeed. Another story to tell you about. The fund manager


Neil Woodford has posted a video apologising for the really poor


results of his fund apologising to his investors, an interesting way to


make apology. Indeed, watch with interest!


You're watching Business Live - our top story:


The European Central Bank has everyone's attention today as it


grapples with the soaring euro and the future of


What is ECB boss Mario Draghi going to say


We will tell you all about it. Tune in, listen to our radio or look at


our website. Our next guest is considered


one of the world's most He's an outspoken advocate


of open source software, which means that all operating


systems should be free to everyone. By any measure,


Mark Shuttleworth has had He's a proud South African,


and made his first serious foray into entrepreneurship as a student


in Cape Town in 1996, when he founded a cutting edge


internet security firm. That proved such a success


that it was bought by US The proceeds of that


enabled him to set up the Ubuntu operating system,


which is free to all softwar. But his ambitions reaches


further than tech - he's the first African in space,


after joining the International Mark Shuttleworth is with us now.


Good morning, welcome to the programme. Let's start with the


space element. Actually, that came first, 27 years old. Incredible,


going to the International Space Station, tell us all about it. I've


always been fascinated by exploration of all kinds. The


universe out there represents extraordinary opportunity and in


many senses the future for all of us. I had a sense that the space


programmes in the US and Russia were opening up. I had the great


privilege of spending almost a year in Russia, living in Russia,


surrounded by space professionals from all over the world, training


with them and then flying to the International Space Station. And you


funded it by selling that first tech company that you founded in your


garage. I was in a privileged position where I could choose what I


wanted to do. That was a nice way to make a break from what I had done


before and create space to think about the future. So you did that


for a year. We went to space, on the International Space Station and it


was there you formalised you're thinking about what you would do


next? I think everyone who has that experience, who goes away from Earth


and looks back at it, has the realisation that the world is small


and fragile. After that you observe, many astronauts want to be part of


things that have an impact. Being a lover of technology and


entrepreneurship, since open source had been essential to my making


something global, I wanted to make other -- enable other people around


the world to build interesting things. So I created Ubuntu as a way


of making open source easy to consume for businesses, and


scientists. Explain how Ubuntu works and how you as a South African


outside of the sort of closed club of Silicon Valley have provided for


many big names in silicon valley this service? Most people are


familiar with Windows and Ubuntu is like that but it is used in a wide


range of other environments, like the Cloud and intelligent devices,


self driving cars, Smart meters, home routers. The magic of Ubuntu is


it doesn't come from one organisation, it represents the


innovation from thousands of different companies and individuals.


Our job is to pull that together and make it easy to consume. So because


have become a platform... You are making easy to consume and is free


which means you are providing to, something to everyone for free which


other people want to charge for. I assume you made some enemies? Yes,


along the way. We changed people's expectations about how they should


engage with infrastructure. How did you come up with the name? Ubuntu is


an African word, not just South African, it is how people treat each


other really well and that reflects open source really well. We have


some tweets. One says, if I was in space I would help as much as I


could with cancer beating treatments. Astronauts are unsung


heroes and people are not or is aware of their efforts. Do you have


this same view? What was it like in space quest might did you conduct


any experiments? I took four experiments to space. Stem cells, we


took them to space to see what would happen. We found they developed in a


way that was much better for medical treatments. So that inspired a bunch


of research. We had to mother experiments, not all of them


successful. I was a happy guinea pig. White is space such a good


environment? You are a brave man! Why is it such a good environment to


carry out those experiments? It is different, so it challenges your


understanding in interesting ways. Scientists like to find oddities and


curiosities which challenged them to dig deeper. You take things to space


to see if they will behave in unexpected ways. Two viewers have


tweeted saying, I'd probably get sick a lot. Another one has said, I


would probably vomit the entire time up there. What impact did it have


physically? Most people who go to space get motion sickness, it is


like seasickness. But it is a small price to pay. I imagine is not


pleasant being sick in space? No, but you are well trained for the


consequences. So nice to have you on the programme, fascinating. Thank


you for coming in. People must mention the fact... Shuttleworth? It


can't be a coincidence! Thank you very much indeed. Good to have you


on the programme. Let's move onto electric vehicles.


Car maker Jaguar Land Rover is announcing that from 2020 every


new model will be available as an electric vehicle.


JLR boss Ralf Speth explains his electric car strategy.


At the end of the day, Jaguar Land Rover is offering


From 2020 onwards, all of our vehicles will be electrified,


and we're offering a portfolio, a portfolio of products.


Mild hybrid battery electric vehicles,


But I would also like to emphasise that is not the end


Diesel and petrol engines are important and they are state


of the art and contribute to the mobility today.


That was the bass of -- boss of Jaguar Land Rover. We have Jane


back, as it promised. Let's delve into some of the stories. The


founder of Twitter going traditional on us, what is he up to? Another


disruptor. If he traditional or not? He wants a bank licence. He isn't


the first tech company to go for a bank licence. You could say this is


great, the banking industry needs more competition but there is


another element to this. This is about regulation and control of the


regulators. What he wants is not a traditional banking licence but what


they are calling in Utah and industrial loan company. This is a


special banking licence that would allow his company to do other things


as well. This is when regulators begin to get a bit worried, because


they may have less control over all the components. In the financial


arena, technology is massively... It's called Fin Tech. They are


really going for it. Traditional high street banks, anyone in


financial services, they cannot rest on their laurels? This is exactly


the case. The biggest potential disruption could be bit coin.


Regulators becoming very concerned about this. Again, it's about


control. Regulators could lose control of certain parts of the


financial industry. In the worst-case scenario, the money


supply... The central bank's job would be watered down. This story


about Facebook, we mentioned earlier about what was happening during the


election, regarding Facebook. Apparently the advertisers are


saying, Facebook said the advertisers can reach many more


people than it actually can because they don't exist on the US census.


That is right, 25 million more young people. Young people is important


because this is the area that marketers want to get to grips with.


25 million more people in that category, and the 34th, exist on the


census showing. This comes at a time when Facebook is facing a lot of


challenges, Snapchat for example. Young people see as much more


appealing. My teenage children are using Facebook press, may be


Instagram and Snapchat a bit more. There are certain challenges out


there. Just quickly, losing track of time so I might get into trouble.


Saudi Arabia redrafting their transformation plan, launched a year


ago, no surprise they have to curtail it? Oil prices are really


low but they want to bring new forms in for long-term growth. Thank you


very much. Good morning. The frightened about


the weather in the UK, let's look at the Atlantic. All eyes on the


Caribbean as hurricane


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