11/12/2017 BBC Business Live

Hello.

This is Business Live from BBC News

with Ben Thompson and David Eades.

Is Bitcoin about to

get a clearer future?

Traders can now bet on the price

of the crypto currency rising

and falling.

So could banks be holding Bitcoin

alongside their gold

and dollar reserves?

Live from London, that's

our top story on Monday

the 11th of December.

The price of Bitcoin has surged

as the crypto currency goes

mainstream and begins

trading on a major exchange

for the first time.

We'll be explaining

what it all means.

Also in the programme:

talking tough on trade -

the WTO rejects President Trump's

protectionist rhetoric and calls for

a more free-flowing relationship.

And markets across Europe are

looking like this: It is a big week

for Central bank action. We will

have all the details.

And we'll be getting

the Inside Track on the man bringing

the family name back

to the chocolate business.

James Cadbury will be

here to talk about his ethical

chocolate business.

And new research suggests the price

of Christmas is rising

significantly. Today we want to know

if you will be celebrating this

year, do you have any clever tricks

to bring the price down? Let us

know. Just use the hashtag

#BBCBizLive.

Hello and welcome to Business Live.

Welcome to the programme.

We start with a major step

for the digital currency Bitcoin.

It's begun trading on a major

exchange for the first time.

The CBOE Futures Exchange

in Chicago opened trading

in Bitcoin futures on Sunday,

and the cryptocurrency

rose above $18,000.

Bitcoin started the year at around

$1,000, but the crypto-currency has

surged in value recently and last

week hit $17,000 for the first time.

Last Friday, it fell

by 14% in a single day,

but supporters say this weekend's

introduction of futures trading

will make it more mainstream.

That allows investors to lock

in a price at which they can buy

or sell something in the future.

This allows them to profit

from price increases

or limit their losses

if prices fall.

Thank you very much, Ben.

Simon Taylor, Co-Founder

and Blockchain Practice Lead

at 11:FS, a consultancy

which advises banks

and governments on the future

of money, he joins me

now.

It is one-way traffic, which begs

the question, who is losing? This is

an asset which is limited in supply,

there are only 21 million bitcoin,

after all.

So will it continue on

this extraordinary journey upwards?

Who knows? It has the capacity to

surprise, it went from less than

$100 to nearly $1000 before, and

then fell off a cliff, and this may

happen again just as much as it

continues to grow.

It is now trading

in Chicago, it has gone a certain

level of respectability? That is the

first step, isn't it?

It is

certainly a mainstream moment, but

it is interesting that the volumes

are very low. That could be just

because it is early and it may

continue. It is also interesting

that, the mainstream media is paying

attention, we are talking about it

on the BBC, instants. I have had 37

people get in touch at the last week

asking how to buy it, which says a

lot.

We were reflecting on Christine

Lagarde from the IMF saying, it is

not the time for bitcoin, far too

early, and looking at the dark side

of the criminal underworld that uses

it as well, and yet as we sit here,

that has been relegated to the last

question I am going to ask you

rather than the first.

I think that

is important, because that used to

be the perception, whereas when you

look at the data, that is a very

small useful bitcoin. Because it was

assumed to behave like cash, people

treated it like that, and

unfortunately cash is used for

illicit goods quite often, but what

they don't look at is, why would I

spend bitcoin when it is going up in

value so much? It is a very bad form

of cash right now because it is

gaining value so quickly.

So you

wouldn't do it for that reason. You

took out bitcoin a long while ago,

is so you have seen the one-way

traffic, hence you have 38 very good

friends you forgot you had.

Yes, it

is something where it was just this

strange story after the side, and

now everybody is paying attention

just because the price has moved.

But let's not lose sight of the fact

that this currency was invented by

people on the Internet that was

anonymous that is getting a

mainstream attention from central

banks, so the really interesting

question is, is losing? I really

don't know. When the price of gold

goes up, jewellery makers lose,

technology makers lose. Who loses

when the price of bitcoin goes up?

That is a very good question. Thank

you very much indeed.

Let's take a look at some of

the other stories making the news.

The French baby milk formula maker

Lactalis has ordered a global

product recall over fears

of salmonella contamination.

It covers hundreds of baby milk

powder products marketed

globally under the Milumel,

Picot and Celi brands.

Health authorities in France says 26

infants in the country have become

sick since early December.

The Gulf State of Qatar has signed

another major deal to buy

hi-tech defence equipment.

It will spend $8 billion on 24

Typhoon fighter jets,

which will be built in the UK.

It follows a deal struck last week

with a French supplier for nearly

500 armoured vehicles.

And Germany's intelligence agency

claims that China has been

using fake LinkedIn profiles

to gather information on German

officials and politicians.

The agency alleges that Chinese

intelligence used the networking

site to target at least 10,000

Germans, possibly to recruit

them as informants.

Now, a meeting of the World Trade

Organisation has opened

in Buenos Aires with a call

for the 164 member international

trade body to be strengthened.

Mariko Oi is in Singapore.

Is this basically a message for

Donald Trump that we don't like so

much protectionism talk?

You can definitely say that, as you

mentioned the World Trade

Organisation has been criticised a

lot lately, especially from

President Donald Trump. This is the

first meeting since he took office,

he has called the global trade body

a disaster, as he pushes his America

first policy. He has for example

threatened to pull the US out of the

trade organisation, and not only

that, the WTO is racked by

disagreements over China, Beijing

wants to be recognised as a market

economy as opposed to the current

status of a nonmarket economy, while

some of its members accused China of

selling its products cheaper than

the market rate, everything from

steel to alimony, and the WTO has

been unable to solve these problems

and kick-start a stalled trade

talks, not just the transpacific

partnership. So the trade

organisation is facing quite a lot

of challenges as it continues its

meeting until Wednesday.

As always,

good to see you, thank you very much

explaining all of that. A quick look

at the numbers for you. This is what

the picture looked like across Asia

overnight. Some optimism over what

is going to be a big week for the

Central banks, notably the Fed and

whether we will get a rate rise on

Wednesday. This gives us an

indication of quite how monetary

policy is changing, and the very

different response that we are

seeing in places like the United

States versus what for example we

are seeing here in the UK. Let me

just show you what Europe is doing

at this point in the day as well,

and yes, little bit of optimism

ahead of what is going to be

starting to wind down before the

Christmas holiday, of course, and we

will discuss these numbers in just a

moment, Jane Foley is standing by to

do that. But first we will head to

the US, because Samir has the

details of the day ahead on Wall

Street.

The focus this week will be

on the US Federal reserve is two-day

meeting in Washington,

which begins on Tuesday.

Now, the Fed will announce

its decision on interest

rates the next day.

The Fed kept interest rates

unchanged at the previous meeting

while pointing to a solid US

economic growth and

strengthening labour market.

Now, investors will focus

on the quarterly results of some

major companies on Thursday.

Oracle, Adobe Systems

and Costco wholesale

will be reporting earnings.

But on Monday, the focus will be

on Bitcoin, the crypto currency that

has been skyrocketing in value

in the last few weeks.

Now, the first Bitcoin

futures will be traded

on the CBOE's Futures Exchanges.

This could be a gateway into giving

the crypto currency some legitimacy,

but others worry that the volatility

of Bitcoin may make these kinds

of futures somewhat unreliable.

Joining us is Jane Foley, Senior

Currency Strategist at Rabobank.

Thank you for joining us. We are all

sort of looking forward to

Christmas, but this is a busy week

for the central bank.

It is. You

have the Federal reserve

announcement on Wednesday, and the

market is fully priced for another

rate hike.

The Fed tipped to hike interest

rates by 0.25% to 1.5% on Wednesday.

But perhaps that would be the

interesting thing about this

meeting, because we really want to

know the message. We are seeing tax

reform going through the process,

and that could have an impact on

growth, and of course that could

have an impact then potentially an

inflation, so is the Fed is going to

hike more or less than we think?

That is the message that we want to

hear on Wednesday.

And that message

could give us an indication about

whether there will be further rate

rises in 2018. We were still talking

about potentially four rate rises

next year, and I touched on it

there, it is so different to what

we're seeing in the UK, where we

have had one rate rise, and that is

it fair now, we don't do anything

too soon.

That might be the case,

but certainly we still draw,

features, and one of these is

despite the fact and we have very

low unemployment levels. We are not

seeing the wage rises come through,

and without wage rises, you don't

get the demand for your deflation,

and the federal government said it

was a mystery that we are not seeing

more inflation in the US despite the

low unemployment rate, and I think

that is one of the reasons why,

we're not seeing wage inflation.

Yes, growth is relatively poor here

than perhaps we are seeing across

the pond, and you expect another

rate rise ASAP?

That is different,

what the by giving them are saying

here is that we're not getting the

investment that we otherwise would

because of the political

uncertainty, and without investment,

you don't get the extra capacity and

therefore you hit inflationary

constraints. But there are

similarities with the labour market,

certainly.

Jane, thank you very

much, and Jane will return to talk

as though some of the papers later.

Still to come.

We are going to get the Inside Track

of the man putting ethics back in

the chocolate business. James

Cadbury will be here to talk to us

about it, and most importantly, he

has got samples, we are told!

You're with Business

Live from BBC News.

He has just given me the thumbs up!

Boxes of chocolate! He hasn't got

mince pies or Brussels sprouts.

Christmas wouldn't be

Christmas without a table

piled high with food.

But the price of the festive grocery

shop has spiralled this year,

thanks to growing food inflation.

Joining us now is Yael Selfin,

Chief UK Economist at KPMG.

Good morning. Explain this for us.

It is no surprise that prices are

going up, but we are so used to food

prices coming down as a result of

price wars between the big

supermarkets.

Indeed, we have had

that for quite some time, but now

with the fall of the pound, what we

have seen is the cost of imports

rising, and that causes inflation

overall, and food prices as well, to

rise.

It is a seasonal issue, too,

for some things as well. Brussels

sprouts up 8.5%. Is that down to the

strength of the pound or the

weakness of the season?

There will

be different factors each food

category if you like. For example we

have seen fish going up quite

significantly, we above what we have

seen on the rise for meat, for

example, over the year to October.

But overall, I would say the pound

made a big impact given that we

import a lot of our food, but there

will be other seasonal effect as

well as weather and labour related

issues.

And how much will people

stop paying Christmas to? Not very

much.

Thank you very much. Smoked

salmon up 22%, would you believe.

There is much more on the Business

Live page, if I can show you some of

the numbers. It includes food, but

also things like laptops, up by 14%,

premium smartphones up nearly 7%,

and as David touched on there, the

pound falling by as much as 20%

relative to other currencies, it

makes clear there, so that means the

stuff that is being imported by

retailers is much more expensive.

Much more on the Business Live page

if you want to take a look,

including the latest market news for

you this morning, and snow related

of course, you know a lot of

disruption yesterday, we have just

heard from Eurotunnel, they are

telling us, if we can get the

pictures to load, services back to

normal after a difficult day for

them yesterday.

You're watching Business Live.

Our top story:

Bitcoin has begun

trading on a major exchange

for the first time.

It launched on the CBOE futures

exchange in Chicago late on Sunday,

allowing investors to bet

on whether Bitcoin prices

will rise or fall.

A quick look at how

markets are faring.

Markets are looking like this across

Europe in the first 45 minutes and

we are going to keep a close eye on

those, because as we discussed with

Jane earlier, the Fed is expected to

raise rates on Wednesday so they

will be keeping a close eye on what

the minutes tell us about potential

rate rises for next year.

The name Cadbury is synonymous

with chocolate here in the UK,

but it's now owned by Kraft

after a takeover in 2010.

And that's prompted one

descendant of founder

John Cadbury to re-enter

the chocolate business.

Sir James Cadbury founded

Love Cocoa last year,

inspired by his great-great-great

grandfather's ethical

and philanthropic business ideals.

Well, Love Cocoa aims

to use ingredients from

independent British suppliers

where possible and his start-up

donates 10% of all

profits to charity.

We are going to join James now.

Thank you for coming into the

studio. We are bound to say, with a

name like Cadbury how can you fail,

but it is not on the box, you're

Love Cocoa. Why didn't you pick up

the Cadbury mantle?

I wanted it to

be my own brand. There is a big

player doing that sort of thing so I

wanted it to be me own brand. So I

thought Love Cocoa.

So you couldn't

have used your own name even if you

wanted to?

No, I looked into a lot,

but it was going to create too much

issues. I didn't think it was worth

it. I wanted to create something

which I was really proud about and I

didn't want to rely on the Cadbury

name.

How frustrating is it not

being able to use the Cadbury name?

Is it frustrating?

It was a bit

frustrating at the start especially

when everybody said why are you not

calling it James Cadbury? Yeah, it

is frustrating, but at the same time

I didn't want to just rely on that,

it is nice to have some independent

and also we are aiming at a

different customer. We are using the

principles when Cadbury first

started, it was about being the

purest and the best and they had a

really amazing packaging which was

hand drawn. We use the principles

with Love Cocoa. So we wanted to

create something different.

Pass it

over.

If you look inside, when we started

the business, it was all about

providing better box to consumers.

So we saw stuff going to consumers

and we wanted wanted to get feedback

and we have got into Harvey Nichols.

This is hand-made chocolate rather

than from a factory. I can see the

high end appeal. What difference

does it make in terms of the

product?

Sorry.

What difference does

it make if it's hand-made?

In terms

of being hand-made you're

guaranteeing the quality will be

there. We are employing people in

the UK so rather than it being made

in a huge factory in other parts of

the world, we are making it in the

UK. And there is a lot of detail and

attention going into that.

That's

grown-up packaging. You talk about

the traditional element, don't you?

This is grown-up packaging. I'm

going to share some!

I note your name is on it?

We have

got it on there. By James Cadbury.

That was allowed, but I wasn't

allowed to call it James Cadbury

Chocolates.

This is organic. This is

a more sophisticated view when you

might have your chocolate with a

glass of wine or with coffee?

We

wanted to do something for adults

and we are going with lots of

different flavours. We have got

avocado and a gym bar. We wanted to

stand out. We do try and do things

differently. I was listening about

how Bitcoin is rising. We take

Bitcoin which is something to stand

out from the market. So all these

little things to stand out is where

you need to be because that's what

Cadbury did when they started. They

were a challenger brand and they

came from being challenger to being

the biggest in the UK and we want to

do something similar, but retain the

quality.

James, thank you very much

indeed. Good luck with it.

Later this week the EU Summit will

take place in Brussels.

Businesses across Europe, of course,

are following the talks closely.

That includes the airline industry

and the BBC's correspondent spoke to

the account and CEO of the Dutch

airline, KLM and asked him how

crucial a Brexit deal was for

European carriers.

For KLM, the UK is an extremely

important market. Swerve out of

Amsterdam 16 destinations in the UK

and swerve more cities in the UK if

Amsterdam by KLM than BA does out of

London Heathrow. It underlines the

relevance of the UK market for us.

If we look to the Brexit, obviously,

it will create a complicated picture

even more complicated picture for

the UK carriers as compared to the

European carriers. So, we need to

see what the exact structure is

going to be. And there is a lot of

unclarity. There is unclarity with

the various parties and stakeholders

as to how it will look like and

clearly for us, as a business,

clarity is an extremely important

thing to get going forward.

What

would be the ideal scenario from a

KLM point of view?

There should not

be an EU a la carte, you can pick

and choose what you want. It's very

important from an EU prospective

that there is pros and cons and

there is things you like and things

you like less. It is very relevant

even if we look to the aviation

sector we are part of a global trade

system between the EU and the UK. So

I think it's very important that

even a aviation should be considered

which is found in other industries

as well.

Jane Foley has joined up again.

There is a lot of change in Saudi

Arabia in terms of the crowned

prince wanting to open up the

kingdom, from early 2018, they will

allow cinemas in the country. Up

until now, there has been no cinemas

there. So, a new industry opening up

in Saudi Arabia. Opening up to

foreign films that we would also

expect, but they say the first

cinemas could open from March 2018.

That's a significant change, isn't

it?

It is the latest story of

change. We heard that they are going

allow women to drive. They want

tourism and perhaps these two

reforms are tied in with that. They

want tour ym. They have a lot of

pressure on their budget and this is

because, of course, the price of oil

in recent years has fallen

dramatically, from an economic point

of view, there is a need for Saudi

to move into different areas, hence

the tourism, but it is about a clamp

down on corruption and reform. Huge

changes really in Saudi over the

last couple of months.

There must be

so many businesses, cinema

operators, now waiting on the

sidelines trying to find out what

the change is and waiting to go in.

So be the tourism companies and be

the cinema operators and the

popcorn, all those wanting to move

into Saudi Arabia?

One of the

interesting things about the

stories, we haven't seen much push

back from the Conservatives because

a lot of people said well, surely

the Conservatives are going to push

back on this, saying this is too

far, too fast in terms of opening up

this economy. If there is a push

back, it will have a business

implication for those companies who

want to move into Saudi from a

business prospective.

This is in the

FT on New Zealand looking to ban

foreigners from buying houses. This

is a country which had an open door

policy until recently about trying

to bring more people in, but now

such is the shortage of stock, it's

putting up the shutters.

It is

amazing, we have seen strong house

price gains in a number of countries

in recent years and of course, I

would say that this is one of the

main features that buyers, the

recent election in New Zealand.

Auckland house prices have gone up

90% in a decade and that's squeezing

people out. Now, we had the election

recently. We had the Labour Party

coalition come in, and that was,

what we saw is a king maker was the

New Zealand first. A real

nationalist party who wanted to ban

foreigners from buying houses so

that domestics can buy, but to stop

foreigners from investing in the

country. This is real nationalistic

policies that we're seeing in New

Zealand which I think is really

quite dramatic given that it's a G

scene 10.

Jane, do you think you

will spend more this Christmas than

you have in previous years?

Probably.

It is always the way. We

have been asking you for your

comments this morning about how you

might save a few quid. William says,

"Don't buy stuff you don't need. It

will cost money and cost the

environment." I like this from

Citizen "Get yourself invited to

someone else's Christmas party. It

will save you money." Buy in the

sales, you can't really do it, you

would save 50%, but lose credibility

at home. Food price inflation means

that things are getting more

expensive, but somehow we always

spend more. It is an easy hit for

the sellers, isn't it, retailers,

you have got to buy?

Yes. Marketing

is so big this time of year as well.

Jane, lovely to see you, thank you

very much indeed.

Thank you for your company, we will

be back at the same time, same place

tomorrow. Bye-bye.