22/12/2017 BBC Business Live

This is Business Live

from BBC News with Victoria

Fritz and Rachel Horne.

The crisis deepens for Spain,

as Catalan separatists win a key

election victory in a poll

that was supposed to see off

their challenge once and for all.

Live from London, that's our top

story on Friday, 22nd December.

The Spanish economy has only just

recovered to pre-crisis levels.

Will the election uncertainty

halt its recent progress?

We'll cross live to Barcelona

to hear what's next for Catalonia.

One of the most economic league

important regions in the whole of

Spain. -- economically important

regions.

Also in the programme....

The US government avoids

a Christmas blackout as it

passes a new funding bill.

We'll be looking back

at a landmark year for

the world's biggest economy.

Also, the very latest on the

markets. Bitcoin took a bit of a

hammering overnight. Elsewhere,

Spanish stocks weighing down, banks

leading the charge lower after

separatists claimed the narrow

victory.

And we'll be getting

the inside track with our

Business Editor, Simon Jack.

Taking a look back on a week

in which the oil giant Shell faces

major allegations of corruption.

And, first we had the plastic

bag charge, but how

about the plastic bottle charge?

MPs are calling for a introduction

of a deposit scheme in an attempt

to protect the seas

from plastic pollution.

What do you think?

Just use the hashtag #BBCBizLive.

Hello, and welcome to Business Live.

We start in the Spanish

region of Catalonia,

where separatists have won a crucial

election victory in a poll that

Prime Minister Mariano Rajoy had

hoped would see off the crisis.

Instead, it has made it worse,

plunging one of Europe's biggest

economies into further uncertainty.

Catalonia is hugely

important for Spain -

it represents a fifth

of the national economy.

19%.

Spain was one of Europe's biggest

casualties following the financial

crisis ten years ago.

The country has made a solid

recovery in the last couple

of years, but over 17%

of the workforce

is still unemployed.

Only Greece has a higher jobless

rate in the eurozone.

Businesses certainly haven't hung

about waiting for the result.

Almost 3,000 firms have

moved their legal headquarters out

of Catalonia, including

the region's biggest banks,

Caixabank and Sabadell.

Rachel.

Joining us now from Barcelona

is Professor Samer Ajour.

Thank you for joining us. Very much

the aim for many in these elections

was to try and clear up the

situation, but it seems to have

increased the confusion.

Right,

first of all, good morning to

everyone from Barcelona. In fact, we

had a very hard day yesterday. We

were expecting a bit more of a

different let's say election

answers, but it seems that it's

going to be a little bit complicated

because, as you've realised, the

elections went in a different way,

and now it's going to be blocked

again if they don't seek a

coalition, because the only thing

that investors really want here is a

little bit of stability. And if

we're going to have again this

block, we're not going to have

stability again. That's a major

concern right now for the whole

economy. And it's one of the biggest

economic elements in Spain. So if

we're going to have this problem

again for the upcoming six months,

I'm not going to be passed mystic,

but I'm not C and light at the end

of the tunnel.

We were talking about

investors, businesses, looking for

stability, they haven't received any

certainty today. Moving forward,

what damage is this doing to the

day-to-day economy in Catalonia, and

as a consequence to Spain's economy?

The thing is, Catalonia and Spain to

rely so much on each other because

basically it's really simple,

because they don't have a lot of

resources, you see. So the lack of

resources, we do need to have

stability. Which means that if we're

depending so much on the service

sector, if we're lacking this

sector, then where lacking

investors, foreign investors or

locals, they're going to add

additional, you know, risk category

on the whole portfolio, and that's

going through quite a bit of risk

compensation. So anyone who wants to

invest here, any company that wants

to proceed with the business in

Catalonia, but acquire a little bit

more of this additional risk that

we're having currently because of

the political situation. This

additional compensation is a bit,

you know, hard to attain. Because we

have a lot of conditions than the

rest of Spain. That's why we've been

having a lot of companies going to

the rest of Spain. So whenever we

have around 3000...

Professor Samer

Ajour, we're going to have to leave

it there. Thank you for joining us

from Barcelona.

Let's take a look at some of

the other stories making the news...

A South Korean court has sentenced

the 95-year-old founder

of Lotte Group to four years

in prison for embezzlement.

Shin Kyuk-ho was indicted last year,

along with three members

of his family, on charges including

tax evasion and fraud.

His son and successor,

Shin Dong-bin, was given

a suspended 20-month prison.

Lotte Group is South Korea's fifth

largest conglomerate.

The US Congress has passed

a short-term funding bill to keep

the federal government running

for four more weeks just a day

before funding was due to expire.

Without the budget deal,

US government departments

would have been forced

to shut down this weekend.

The executive chairman of Alphabet,

that's Google's parent company,

is to step down in January.

Eric Schmidt, who has been

with the tech giant since 2001,

will remain on the board

as a technical adviser on science

and technology issues.

Alphabet said it appoints to -- it

expects to appoint a replacement

later this year. Let's check in with

the markets.

China stocks dipped on Friday

as weakness in banking and consumer

stocks offset gains in the energy

sector, but the indexes

were up for the week.

Asian stocks more generally edged up

though on new data pointing

to steady growth in the US economy.

Over in Europe, investors

are digesting the news

of the Catalan separatist victory

and it's the euro that's the focus.

Although at this time of year we're

seeing pretty thin trading,

many have clocked off

and closed up their investment

positions ahead of Christmas.

Some speculators appeared to have

sold the euro already.

The overall impact of the Catalan

vote on the euro and the wider

global markets is likely

to be limited, however.

Catalonia cannot become a sovereign

state if no other country

recognises its independence.

It won't even be able

to have its own currency

It won't even be able

to have its own currency

under such conditions.

under such conditions.

Let's head over to the States now.

Yogita Limaye has the details

about what's ahead on Wall Street

today.

It is the last day of trading before

the long Christmas weekend

and there is a whole lot of economic

data coming out.

The Federal Reserve will be watching

closely for an inflation measure

that it likes to look at when making

decisions, the Personal Consumption

Expenditures Price Index.

It factors in prices paid

by consumers here in the US

for goods and services,

but without the volatility

of food and energy costs.

This rate is expected to have gone

up by 0.1% in November.

The US Commerce Department

will release the number of new homes

that have been sold last month

and that is likely to have fallen

compared to October.

Investors will also find out how

demand for capital goods

made in the US is faring

and that is expected to have risen.

Joining us is Shaun Port,

Chief Investment Officer

at investment management company

Nutmeg.

Thank you for joining us. We want to

talk about the year the markets have

had. We have seen phenomenal gains,

the MSCI, which tracks 47 markets

around the world, is up 27%. What

has been driving the industry is up

with yellow investors have become

more confident about the global

economy, the global

has done really

well at the moment and growth has

become so nice. Developing markets

and emerging markets are doing well

at the same time. -- growth has

become synchronised. Investors are

more optimistic, it has been driving

earnings up, and political risk is

going down despite we saw in Spain

overnight.

It was a lack of

volatility, but a chaotic news

cycle. It's just not being driven by

the same agenda any more.

It's

really interesting, actually. Is the

news about Catalonia today, if you

had played that wacky year ago, --

if you had played that back a year

ago, it would not have done as well.

Fundamentals are doing really well

at the moment, it's good news.

Low-interest rates have been

contributing to this, and the cheap

money in the markets. But those are

starting to change. Moving into

2018, will we continue to see these

big games, or is it time for the

markets to calm down a little bit?

I

think we will see a coming down of

the markets. The emerging markets

delivered more than 30%, incredible

game. We won't see a continuation of

that in 2018. Growth is

accelerating, if anything. US tax

cuts coming in, maybe more

infrastructure spending in the US,

and global growth is looking strong

so games will continue but not at

the levels we have seen this year.

Investment managers have got to put

the money somewhere. If you have a

pension fund and you're given the

money to invest somewhere, they have

to put it somewhere. The alternative

is at the moment don't look great.

Is that why the equity markets have

been stronger silly if you look at

Government bonds, here in the UK

they are

incredibly expensive,

investors don't like the returns,

equities look much more interesting.

Generally, investors haven't enjoyed

the last nine years of equity

markets going up, not everyone has

enjoyed this raise. Investors are

now starting to believe there are

gains ahead, good news.

They still

get bonuses, don't they? I think

they have been enjoying it a little

bit! What will you be focusing on

next year?

Politics is always front

and centre, but what happens in 2019

is going to fascinate investors.

When does the US economy start to

turn down towards a recession into

2019? That is going to be a theme.

And Brexit as well. Shaun Cummings

you will be back to look at the

papers at the end of the programme.

Still to come...

We'll be getting the inside track

with our business

editor, Simon Jack.

Taking a look back on a week

in which the oil giant Shell faces

major allegations of corruption.

You're with Business

Live from BBC News.

Are you prepared

for Christmas dinner?

Lots of us still aren't.

I'm not, we've got them coming over

after my shift finishes and we've

still got some shopping to do.

Today is expected to be the busiest

day of the year for food and drink

sales as we stock up for the big

day.

Ben Thompson is at a supermarket

in east London, where the doors

opened bright and early.

He has managed to turn work into

leisure! That doesn't look like you,

Ben! There you are! I love your

jumper!

Thank you! But how dare you

say that this is leisure, I've got a

big list of things to pick up and

bring back for you guys, you should

see the state of my trolley. Really

busy 48-hour as for the

supermarkets. We are expected to

spend a staggering £1.5 billion over

the next two days as we stock up on

all of that food and drink before

the big day. And the supermarkets

are clearly gearing up. Prices are

bit higher than this time last year.

We've talked a lot about inflation,

but sales expected to be up on last

year. Let me introduce you to

Jennifer from Morrisons. How would

you prepare for this and make sure

you've got the right stuff on the

right Charles Tapper Right Time was

but it's a really busy time of the

year and we're doing everything we

can

to prepare. We are due to sell

nearly twice this week as we would

in a normal week. It is a big

logistical challenge. We have 1000

lorries on the road delivering stock

to our stores and a new online stock

ordering system that we are able to

use to make sure that we have the

right stock on the right Charles at

the right time. It is all hands on

deck. Everyone from head office is

in the stores to support us.

It's

pretty stressful for you guys and

also for the customers.

It is, it is

stressful for customers so we are

doing everything we can. Customers

have said that they often forget a

key item on Christmas eve, they go

home and they forgotten it.

Cranberry sauce, Sellotape,

batteries for toys. We've got a

number of things in stores to help.

Fiona, on the back of her T-shirt,

she has a list of the ten most

commonly forgotten items.

Fiona,

show us the list... These are the

things that people have forgotten.

Batteries, tinfoil, sticky tape,

cranberry sauce, napkins, bread

sauce, stuffing, Christmas crackers,

all sorts of things. Nice to see

you, Jennifer, thank you. I've got

my shopping and AQ saw a huge list

for you. I'll see you in the New

Year, have a great Christmas!

You're watching Business Live.

Our top story: Catalan separatist

parties have won a majority

in regional elections,

setting the stage

for more confrontation

with Spain's government.

The vote is a major setback

for the Spanish Prime Minister,

who called this election in response

to October's disputed referendum.

Plenty more on that story. At the

moment, we've not really seen

markets move, although we've seen a

little bit of the quotation when it

comes to the ibex, and the euro is

headed slightly lower against the

dollar -- a bit of degradation.

And now let's get the inside track

on some of the other

business stories making

the headlines this week.

One that's seen Donald Trump emerge

victorious with his huge tax reform

bill, and we've seen Shell

in the headlines over

its actions in Nigeria.

To discuss this, we're now joined

by our business editor Simon Jack.

What is the most important story

this year?

It is hard to beat the

Donald Trump tax reforms. The

implications for the rest of the

world really profound. The

corporation tax cut from 35 and 21%.

That will increase some of their

earnings by 20-30%. It obviously had

criticisms that it was a tax cut for

multinationals. There will be tax

implications for individuals and

middle income families, but those

tax reforms will be tailored off in

2025, but for the corporation tax,

it is permanent. If you are going to

put rocket fuel in the well's

biggest economy when it is already

growing at 4%, the question is, is

that putting a bit too much gas in

the tank? We use the global

inflation picked up a little bit.

You have seen oil inflation, said

the risk is that global inflation

picks up a little bit. China and the

eurozone are growing well, the US

will have a spurt. Does that mean

the Federal Reserve has to start

raising rates faster than it

previously did? Will Bonds look

vulnerable and stock markets look

vulnerable? A lot of people are

thinking the stock market as it is

is price point to perfection.

Everything has to go right. I have

seen some people say that sometimes

the travelling is better than

getting there. Maybe use will see a

bit of a wobble in the stock market.

The Donald Trump tax reform is the

biggest thing to happen to the

global economy. The other thing is

they will have one-off tax on

overseas profits for US firms. So

the likes of Apple and Google who

have got hundreds of billions of

dollars sitting offshore in places

like Ireland and Bermuda, they will

get tax anyway, so you may as well

bring the money back and there will

be a wall of cash hitting the US.

The other huge story is being called

the biggest corporate bribery trial

of all time.

We're talking about the decision

by Italian authorities to try Shell

and Eni over a Nigerian oil

deal from 2011.

What do they stand accused of?

In 2011 shall and Eni but this giant

oilfield in Nigeria for $1.1

billion. The money ended up in the

pocket of a former oil minister, and

the allegation is he used that money

to pay for bribes. Shell and Eni

always maintained they left it at

the door of the Nigerian government.

The point is they are saying they

knew that this money would end up in

the wrong hands. Usually these cases

are settled and this one has not

been settled. Both Shell and Eni,

the current chief executive of the

oil giant Eni, and the former number

two of Shell will go to trial in

Italy and it is very rare that you

see that. That goes to court on

March the 5th, probably the biggest

corporate corruption and prosecution

in history.

corporate corruption

and prosecution in history.

The Nigerian people lost out

on over $1 billion dollars,

equivalent to the country's

entire health budget.

When you do business in certain

parts of the world there are some

risks. It is a fact of life

sometimes. Corruption is seen as

pretty stubborn in Nigeria.

Anti-corruption campaigners will say

the real losers in all of this are

the people of Nigeria because this

oil wealth should go into the

government coffers and that should

make its way to public services, it

does not, it ends up in people's

bank accounts and that is the

problem.

Simon Jack, thank you very

much and a very Merry Christmas to

you.

For many people in ASEAN about of

singing is not seem as bad or good

on a night out. At least a dozen

companies are rolling out karaoke TV

or karaoke booths in which many

locations.

SINGING.

Here I am in a Beijing shopping

centre and suddenly I feel the need

to express myself in song.

Well, it is a good thing that

karaoke here has busted

out of the singing dens

and into the mall.

Like so much else in China you scan

and pay with your phone,

choose a song and you are away.

# Fly me to the Moon and let me

play upon the stars.

# Let me see what

spring is like on...

Some will see this and think

there is no way I am

going to belt out my favourite song

in public for all to see and hear.

But for plenty of people in China

that is not a problem.

There are already tens of thousands

of these booths in place.

It is projected that

within five years there will be

hundreds of thousands.

They are very quiet, I think they

need to turn up the volume, give it

some welly, girls! A story we have

been seeing tweets about today and

that is plastic pollution. A

suggestion that MPs are saying that

we should pay a deposit for plastic

bottles in an attempt to protect the

seas. A few other ideas as well. We

have been asking for your thoughts.

Dan Martin said the plastic carrier

bag tax has made a difference, so

why not bottles? Maybe a cashback

for proper recycling would offset

and help.

Some saying charge a

deposit on glass bottles and viewers

in the UK will remember we used to

have glass bottles and you would

bring them back to the supermarket

and get some money back. A lot of

people calling for that. What do you

think about this? Do you use a

plastic bottles?

Yes, I do. It would

be great if they had public water

fountains to fill bottles up. And

there is the influence of the Blue

Planet.

The big nature documentary

running on the BBC which carried

strong visual footage of the plastic

waste in the sea.

It shows you the

power of that image and what plastic

does once you finish with it. A

great story encouraging people to

recycle and be responsible.

And

proposing a sliding scale on taxes

for plastic packaging, the idea is

to make the producers of the plastic

paid. One thing we should say, and a

hi-fi to BBC News, that some firms

are highly could sensitive to

pressure on the issue. And one

company is saying it will change its

policy on plastic, so well done to

BBC News. There is a story in the

Financial Times. It looks like a

company that makes iced tea have

decided to change their name and

they are going to start looking at

the benefits of block chain

technology. That is a shift in

focus.

It is one of the biggest

pivots in businesses I have seen.

Small companies in China that used

to make things like furniture are

now investigating artificial

intelligence and their stocks have

soared. It takes us back to the era

of the dot-com bubble and you add a

word to your name and the price goes

up. It shows the craziness

surrounding bitcoin. Block chain is

behind bitcoin.

I was thinking as we

were chatting whether our viewing

figures would go up if we had a

little bitcoin Medallion, with your

bitcoin password numbers. Let's see

if the costume and make-up

department can help us out. Another

story that is extraordinary for this

time of the year. It has been

described by the New York Times as

cute. I think it looks terrifying.

It is a doll with waist length gold

in here that talks and responds to

children's' questions and it could

pose a bit of a threat. Hackers and

identity thieves are looking at

this.

Anything with a microphone and

a camera can be hacked. It relates

to things like personal assistance

as well with microphones and

cameras. If they can be hacked, you

can listen in and spy on people and

they are security concern. Your

kitchen is connected, your fridge is

connected and though security

concerns will increase.

More and

more people are buying these toys

that are progressing, especially in

the run-up to Christmas. You would

assume it is properly regulated.

Thank you very much for joining us

and happy Christmas. That is it from

today. Plenty more business news

throughout the day and on the live

page.