13/12/2017 BBC Business Live


13/12/2017

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LineFromTo

you agree or is Facebook

right to defend itself?

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Send your comments

to hashtag BBCBizLive.

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Lots of comments from you already.

So keep them coming in.

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Is Facebook ripping society apart?

Facebook says no. Many of you

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disagree. We will talk about that

later.

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The World's most

powerful Central Bank -

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the US Federal Reserve -

will today announce if it plans

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on raising interest rates

for the world's biggest economy.

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Any rise will be seen

as an endorsement of not only

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the strength of the American

economy, but also the global

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economy.

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This is ten years on from

the financial crisis.

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There have been three rises

since December 2016 and markets

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are already factoring

in another rise later.

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US economic growth has hit

an annualised rate of more than 3%

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in the past two quarters,

while the unemployment rate

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in the US is at its

lowest since 2000.

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US jobs growth was better

than expected in November

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with the number of new jobs rising

by 228,000 with the unemployment

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rate holding steady at 4.1%.

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And in October, the IMF

upped its forecast for the global

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economy and now predicts growth

of 3.6% this year and 3.7% in 2018.

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We're joined by Karen Ward,

Chief Strategist, JP

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Morgan Asset Management.

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Hello Karen.

Good morning.

I am

assuming that we are going to see a

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rate rise today. Is this the right

medicine?

That's right today. It is

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largely expected to see another

quarter point increase. The question

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really is what they tell us about

next year and how many more they

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think are in the pipeline.

So what

do you think they will say and let's

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remember that Jerome Powell takes

over in February from Janet Yelland

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so a New Year with a new boss?

That's right. We have heard a lot

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from him in recent months and it

doesn't sound like that's going to

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deliver many changes at the Fed in

the terms of their thinking or the

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policy. The question is about tax

reform and what that is going to

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deliver and if it passes and how

much it will boost the economy and

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how monetary policy fits into the

shift into fiscal policy.

The news

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overnight about Alabama, it might be

more difficult for the Trump

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administration to get through the

tax reform in the way that they

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wanted at least?

Exactly right. So

the marredin is 49-51 so that does

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add to the uncertainty of what that

final tax package could look like

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and what a stimulus it will be.

So

what will be on the mind do you

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think of the Fed in 2018? Given the

year we have had with a strong surge

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on Wall Street and good steady

economic growth in the US. What are

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we looking like in 2018?

Not just

the Fed, but all the central banks

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are walking this difficult balance

at the moment of trying to continue

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to foster the recovery, generate a

little bit more inflation. If

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anything, wage growth is still a

little bit low in the US as it is in

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most of the developed world. So that

suggests, you know, keep some

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stimulus in the pipeline. But at the

same time, they are not wanting to

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stoke up any asset bubbles, you

know, make the mistakes of the 2000s

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when at the peak of the crisis in

2007, they were criticised for doing

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too little, too late. So that's the

difficult balance they will be

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weighing up. That still points this

them being fairly cautious and

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fairly gradual, but continuing to

get to some sort of normal rate over

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the course of the next two years.

What is the normal rate? In

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textbooks it says it should be

around 4%, but what is the normal

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now? Is there a new normal?

It's the

big debate. A lot of the things that

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made us think that it was a lot

lower were factors like very low

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productivity, perhaps a global

savings glut still continuing, some

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of those signs look a little bit

better. We do see trade picking up.

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We see investment picking up. That

could maybe help with productivity.

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So maybe that old concept of normal

hasn't completely gone away.

Karen,

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thank you very much indeed. The

chief strategist of JP Morgan Asset

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Management. It is a story we will be

watching throughout the day. Of

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course, it is affecting markets as

they trade in anticipation really.

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We will talk more about that a

little later.

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Let's take a look at some of

the other stories making the news.

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The Financial Times reports that

Walt Disney is close to confirming

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a deal to buy 21st Century Fox's

entertainment business

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for around $60 billion.

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The sale would include the 20th

Century Fox film studio and the Sky

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and Star satellite broadcasters

in the UK, Europe and Asia.

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Facebook has responded

to a former executive

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who said the social network

and other services like it,

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were "ripping society apart".

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Chamath Palihapitiya made

the comments last month

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but what he said only hit

the headlines on Monday.

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Facebook said the company

was different no to when he had

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worked there six years ago

and "as we have grown

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we have realised how our

responsibilities have grown too."

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That's our Twitter question today.

Send in your xhevenlts

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-- comments.

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Ryanair passengers face disruption

to their Christmas travel plans

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after pilots and crew announced

industrial action in a bid

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to win union recognition

and better conditions.

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In Ireland, pilots based

in Dublin will strike for one

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day on 20th December.

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Meanwhile Ryanair pilots and cabin

crew in Italy are to strike for four

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hours on 15th December.

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The American computer data storage

company Western Digital has

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settled its long running legal

dispute with Toshiba.

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The dispute could have prevented

the $18 billion sale of Toshiba's

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prized memory chip unit.

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Monica Miller is following this from

our Asia Business Hub in Singapore.

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Finally there could be an end in

sight?

Yes. It has been an ugly,

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bitter divorce. Yes, it's finally

over. Both Toshiba and Western

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Digital have agreed to resolve

disputes which now paves the way for

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the sale f Toshiba of's $18 billion

unit. The global investment firm has

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partnered with South Korea's SK

Hynec. The legal battle started this

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year. It was Toshiba after said it

would have to sell the chip dftion

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in order to recover big losses it

had accrued. The US partner, Western

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Digital, threatened to block the

sale, but now it's over, Western

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Digital can now pursue other

pursuits including investing in a

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new product line of memory chips.

Toshiba Can shore up its balance

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sheets by the end of the fiscal year

in March and avoid being delisted on

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the Tokyo stock exchange.

Monica, thank you. Relief all-round

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especially for all of those who have

had to talk about it for so long.

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Markets in the US seeing

new record highs last night,

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on reports that policy-makers

could push through that tax deal

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which would see the US corporate tax

rate cut to 21% next year.

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It's not yet a done deal

yet, but was enough

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to push markets higher.

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Up 0.5% yesterday.

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But that's not feeding through to

this morning's open in Europe.

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There are a lot of questions

that need answers as far

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as policy is concerned.

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We might get some answers

from today's Fed meeting

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as well as tomorrow's

Bank of England and European

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Central Bank rate meetings.

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In the UK, they'll be looking

closely at what yesterday's rise

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in inflation data means,

hitting 3.1% in November,

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the highest level in five years.

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Not welcome news for consumers.

We will get an update on employment.

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It is expected to fall to 4.3%, that

would be a 42 year low.

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More on that in a moment,

but first Samira has

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the details about what's ahead

on Wall Street today.

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Many will be watching what happens

with the US Federal Reserve

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at the end of their two-day meeting,

but taxes will also be

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the focus on Wednesday.

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US President Donald Trump

will deliver a speech on the plan

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to overhaul the American tax code.

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And this comes on the same day

lawmakers in Washington will host

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the one and only open conference

on tax legislation.

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Republicans are planning

to have a final agreement nailed

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down by the end of this week.

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And finally, the US Labor Department

will release data on consumer

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prices for November.

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The low rate of inflation has been

a persistent economic

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mystery in recent months,

as falling unemployment and rising

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economic growth have

failed to push up prices.

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But new figures on Wednesday

will shed light on where

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we are with inflation,

and if it gets any closer

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to the Fed's 2% target.

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That was Samira, of course.

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Joining us now is Tom Stevenson,

Investment Director

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at Fidelity International.

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We have talked about markets and

what's going on. From your point of

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view, is it one game in town and

that's the Fed?

It is one game in

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town and that's central banks. Lots

of central banks getting their final

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meetings of the year out of the way

before the holidays start. I mean,

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here in the UK, we've got an

interesting meeting tomorrow, you

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mentioned it, Ben, we've had

inflation figures which were pretty

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high. Today we're going to get

unemployment data which will show a

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40 year low for unemployment, but

the important thing is that wage

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growth is not there. So I think

that's what the bank will be looking

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at. It will say, well, inflation is

high, wage growth is low. It will

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stifle the economy. There is no

incentive for us to raise interest

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rates in the UK unlike will the US.

I think that gap is going to widen

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between the US and the UK.

How

concerned are you as far as the UK

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economy is concerned. There is a lot

of doom sayers about the situation

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at the moment?

Well, it is a mixed

bag actually. Growth is low, but it

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is positive. I think the gap between

wage growth and inflation is a real

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problem for the consumer side of the

economy and of course, that's a big,

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and important part of the UK economy

and of course, you know, hanging

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over everything is the uncertainty

of the Brexit negotiations. You

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know, so we had some good news last

week, you know, we maybe edging

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towards a deal, but for the next

year, at least, there is going to be

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a lot of uncertainty.

Tom, a quick

word on oil. It is a long time since

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we've spoken about oil. $65 for

Brent, up 2.4% and that's because of

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the explosion?

Yes, well, there are

two things. There is the shutdown of

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the Fortes pipeline which caused a

short-term spike, the direction of

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travel for oil is upwards. There is

discipline from Opec and Russia in

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terms of curbing production. That's

keeping a floor on the oil price and

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I think that's likely to continue. I

think that oil will stay in the $60

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to $70 range.

You say it is a while

since you talked about oil. We

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talked about it yesterday! Ben

wasn't listening. We have got that

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story we just talked about, we had

other issues regards with supply

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from gas from Italy to Russia. Gas

exports in Britain's North Sea, they

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will be halted until January, 2nd

due to the shutdown of the Fortes

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pipeline. Knock on effect with gas

exports affected by this as well.

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Which, of course, is a critical time

of year with it being winter, our

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demand for energy is going up at

this time of year. So, interesting

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to keep an eye on that.

It shows how

vulnerable we are to some things

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like that. A little crack in the

pipeline can have such an impact on

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prices. We will have more for you

later.

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Still to come:

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It's a bugs life.

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We speak to the man who is using

insects to make animal feed -

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freeing up crops for humans to eat.

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You're with Business

Live from BBC News.

0:13:070:13:11

First, let's talk about Dixons

Carphone.

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Pre-tax profits at the tech

retailer have slumped more

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than 60% in the six months

to the end of October.

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It's warned that the mobile phone

market remains "challenging",

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with customers hanging

onto handsets for longer.

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Let's speak to Eleanor Parr,

a retail analyst at GlobalData.

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It is a familiar tale, we have heard

from the boss of Dixons Carphone

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that people just aren't changing

their technology as quickly as they

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used to.

Absolutely. In times of

austerity that we are going through

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at the moment, people just can't

afford to upgrade their mobile

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phones. There has also been an

indication that consumers are less

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inclined to upgrade their phones,

iPhone in numeric Severn, 6, numeric

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, people are not seeing the

difference. But there is a

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difference with the very new iPhone

by.

And the less money that they are

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making when they go overseas with

the phone, because with the roaming

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charges being knocked down,

thankfully and EU wider decision,

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but it hits Dixons.

Yes they said

this could cost them up to £40

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million.

What we talk about

consumers having less money in their

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pocket, we're talking about

inflation rising quickly, it is that

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familiar tale again, people just

don't have the money right now.

Yes,

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electrical is has been very hard hit

by this. Retailers have seen big

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increases in cost prices, and

although some has been passed to the

0:15:110:15:19

customer, retailers themselves have

had to take a hit.

Eleanor, thank

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you very much. Digging deep into the

Dixons Carphone figures that were

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out early today. It is that time of

year. Google has told us what are

0:15:270:15:31

the most searched for terms on the

UK website. No surprises, Meghan

0:15:310:15:37

Markle is the top one on the list,

and fidgets spinners also up there.

0:15:370:15:50

You're watching Business Live.

0:15:560:15:58

Our top story: US interest rates

are expected to rise

0:15:580:16:01

by 0.25% later today.

0:16:010:16:05

It would be the third increase

by the Federal Reserve this year.

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But with inflation still relatively

low, there's a big debate

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about whether raising rates

is the right answer.

0:16:100:16:19

A quick look at how

markets are faring.

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The markets are digesting some

corporate news stories that are out

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there. But also treading water ahead

of a Fed announcement later today.

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That is how Europe is trading at the

moment. I like it when it changes

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from red to green like that while we

are on it. It doesn't happen

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from red to green like that while we

are on it. It doesn't happen! Little

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things.

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Now, here's a question -

how do you feed a rapidly growing

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world which has limited resources?

0:16:490:16:50

The UN predicts that by 2050

the global population will have

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reached almost ten billion,

raising big questions

0:16:530:16:54

over food security.

0:16:550:16:56

Will there be enough to go around,

and where will it come from?

0:16:560:16:59

Well, one French start-up

thinks it has answer.

0:16:590:17:01

By reducing agriculture's dependence

on traditional animal feed,

0:17:010:17:03

it would free up food like soybeans,

corn and oats for human consumption

0:17:030:17:06

rather than animals.

0:17:060:17:11

It's secured more than $1 million

of funding, and produces animal feed

0:17:110:17:14

from insect larvae using waste

fruit and vegetables.

0:17:140:17:24

Syrine Chaalala is co-founder

and Chief Operating

0:17:240:17:25

Officer at Next Protein.

0:17:250:17:32

That is the company behind all of

this. Good morning. Syrine

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That is the company behind all of

this. Good morning. Syrine, you and

0:17:390:17:40

your husband co-founded this, you

used to work at the UN and your

0:17:400:17:43

husband is a chemist, so put the two

together and you end up with this

0:17:430:17:47

company.

Exactly, and it works out

great because we both have our own

0:17:470:17:51

skill sets, and it allows us to work

and live together, because I was

0:17:510:17:56

working in the UN in the field, and

as a professional woman it is not

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always easy to work away, so it is a

great opportunity.

Say you are both

0:18:000:18:04

based in Tunisia but you also have

offices in Paris, so you are between

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the two?

Our headquarters is in

Paris, but the production plant is

0:18:100:18:15

in Tunisia, because the insects we

have chosen, insects in general have

0:18:150:18:20

to have certain parameters in place

would include lighting, temperature,

0:18:200:18:24

so for us it made sense to have our

production plant in Tunisia where

0:18:240:18:31

the temperatures are ambient audio

long.

We are looking at pictures

0:18:310:18:35

here of what appeared to be bugs.

Just explain this for us.

To give

0:18:350:18:42

you an idea of what a day looks like

at baulk, we start receiving some

0:18:420:18:49

fruits and vegetables that would

have ended up in landfill, and they

0:18:490:18:56

have already gone through triage,

but we also make sure they are clean

0:18:560:19:02

and authorised fruits and vegetables

by the European Commission. Then we

0:19:020:19:06

have our own recipe, puree that we

have created through lots of

0:19:060:19:11

research which is the optimal puree

from the insect growth. We grind the

0:19:110:19:16

fruits and vegetables, we take it,

we feed the lava, which are placed

0:19:160:19:21

in their own chamber, and once they

reach a certain size, we take 95% of

0:19:210:19:29

them, which are processed into three

main products, we have our protein

0:19:290:19:36

powder, oil and the Next grow, a

natural fertiliser.

It sounds quite

0:19:360:19:44

expensive and labour-intensive. Is

it expensive for farmers who will be

0:19:440:19:50

buying this feed, and to what extent

will it help with the issue of food

0:19:500:19:55

security in the future?

It will help

in many ways. The product that we

0:19:550:20:01

are putting on the market is very

competitive. Currently as you may

0:20:010:20:06

know the what is used as a source of

protein, the traditional protein

0:20:060:20:10

sources that are used are soy bean

and fishmeal. We know that the

0:20:100:20:18

fishmeal is depleting, and soy beans

are resource intensive. What we are

0:20:180:20:24

doing is offering an alternative

that is sustainable and that has

0:20:240:20:29

close to no carbon footprint. And

also has a nutritional value that is

0:20:290:20:34

equivalent.

And why is this better

than animal standing in fields

0:20:340:20:38

eating grass? What difference does

it make?

Our product will not be

0:20:380:20:43

consumed by cows, for example. The

main animals that will consume our

0:20:430:20:46

product are fish, aqua culture,

authorised in Europe, poultry and

0:20:460:20:53

pigs. And as you may know, we are

going back to nature. Chickens eat

0:20:530:20:59

insects naturally, fish eat insects

naturally, and pigs are omnivores.

0:20:590:21:04

So it is better for their health. It

is so much more to talk about, as

0:21:040:21:10

usual. Time is getting the better

us. Syrine

0:21:100:21:14

usual. Time is getting the better

us. Syrine, thank you very much, and

0:21:140:21:17

your new adventure starts in a few

months with your first baby.

0:21:170:21:21

Yes, we are already preparing for

succession!

You will have to figure

0:21:210:21:26

out how to run the country -- the

company and be parents!

0:21:260:21:32

In a moment we'll take a look

through the business pages,

0:21:320:21:34

but first here's a quick reminder

of how to get in touch with us.

0:21:340:21:38

Stay up-to-date with all of the

day's business news as it happens on

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the live page. There is insight and

analysis from our team of editors

0:21:400:21:44

right around the globe, and we want

to hear from you, too. Get involved

0:21:440:21:51

on our web page.

0:21:510:21:56

BBC live, what you need to know,

when you need to know it. Do get in

0:22:030:22:09

touch with us. That's talk about

some of those questions at the

0:22:090:22:19

start, whether Facebook is indeed

caring society apart, that is the

0:22:190:22:23

accusation. People saying yes and

no, both positive and negative

0:22:230:22:26

influences on me. We have pink bag

lady, who says I am largely

0:22:260:22:35

housebound, Facebook is my window

into the world, my life is poorer

0:22:350:22:38

without it. And then Queen caffeine

says negative, I left Facebook in

0:22:380:22:45

favour of Twitter and Instagram,

much less drama, messages are to the

0:22:450:22:48

point, although the characters are

getting more and more, are they? And

0:22:480:22:53

one here, Facebook totally negative,

young people and students waste

0:22:530:22:56

their time taking of posting

pictures.

0:22:560:22:59

, Tom, what do you think?

There are

pros and cons, and they? Everything

0:22:590:23:08

in moderation.

I'm always reminded,

when we do these stories, we have

0:23:080:23:13

certain demographic watching us.

Let's talk about Disney and

0:23:130:23:19

21st-century fox, this was breaking

yesterday afternoon when the news

0:23:190:23:22

that Comcast had pulled out came

through, and we also saw Disney and

0:23:220:23:28

21st-century shares up on Wall

Street, too.

This is an interesting

0:23:280:23:34

deal for Disney, a reflection of the

changing face of entertainment.

0:23:340:23:39

Clearly streaming services, the

likes of Netflix and Amazon,

0:23:390:23:44

are really taking over from

traditional television, cable,

0:23:440:23:48

satellite subscriptions. And I think

the Disney is very much in that

0:23:480:23:53

latter camp, and it needs to move

into that streaming world. So this

0:23:530:23:56

would be a very interesting deal.

So

much consolidation and working out

0:23:560:24:03

what bits might need to be sold off

to make the deal go through.

What it

0:24:030:24:06

looks like is the Murdochs will keep

whole of the new things, which is

0:24:060:24:16

their main interest.

Thanks the company today. We will do

0:24:160:24:21

it all again tomorrow. Are you here

tomorrow? I'm not. I am here.

0:24:210:24:26

Goodbye.

0:24:260:24:29

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