10/01/2018 BBC Business Live

This is Business Live

from BBC News with

Samantha Simmonds and Tim Willcox.

All systems go -

the World Bank says the global

economy is set accelerate this year.

But will everyone feel the benefit?

Live from London, that's our top

story on Wednesday, 10th January.

It's being predicted the global

economy will operate at close

to full potential for the first time

since the financial crisis of 2008.

We'll assess what impact that

will have on real prosperity.

Also in the programme:

Airbus seals a huge deal

with China to supply 184 jets.

We'll assess what this

means for the company.

Here is how the markets are looking.

Today we're bringing

the sparkle to Business Live

we'll be talking Swarovski crystals

with the great, great granddaughter

of the company's founder.

As always, do get in

touch with your thoughts

on any of the stories

we're covering the show.

Just use the #BBCBizLive.

Hello and welcome to Business Live.

Now, after a decade of hardship and

austerity, things are looking up.

The World Bank says global economic

growth is likely to strengthen this

year and that it will be the first

year since the 2008 crisis when the

world will be operating close to its

full potential. Overall global

economic growth is expected to edge

up to 3.1%. That's after a much

stronger than expected 2017.

Advanced economies will be around

2.2%. Emerging economies are likely

to grow by 4.5%. Generally this is

because of increased investment in,

improved confidence and a rebound in

commodity prices. This last one is

especially important for developing

economies. Well the World Bank says

the focus should turn to the

policies needed to boost potential

growth and living standards.

Dean Turner is an Economist

at UBS Wealth Management.

Thank you very much for joining us

on the programme. Any surprises

here, do we think or not?

The

overall message in terms of global

growth holding up at levels similar

to what we saw last year, there has

been an upgrade, but there is not

much change. It is not a surprise,

but it is an encouraging story.

In

terms of inflation, looking at the

China figures?

In terms of

inflation, clearly we have been

through a period of extraordinary

low inflation. It seems that as we

are moving into 2018 the process of

normalisation will continue. In

terms of what we have seen in China

today, I mean, the numbers are

pretty much in line with what the

markets were expecting.

1%, 1.5%?

Numbers around 1.8% for CPI in China

which is what the markets was

expecting, but it is important to

remember with inflation in China, it

is driven by housing costs and food

price inflation so it can be

volatile in the short-term.

I was

talking to the author of the report

earlier and she was saying that it

is cyclical and this is to be

expected and it is about time

really, but also to be expected will

be a downturn, she said, what needs

to happen now, everyone needs to

manage their economy to say make

sure that doesn't happen and learn

the lessons of the past, what does

the global economy need to do to

keep this going?

I think what we

have seen so far in this cycle, we

have seen the beginning of monetary

policy, normalisation, we are likely

to see further normalisation take

place this year within Europe. We

are likely to see the quantitative

easing programme slowing, but

perhaps coming to an end this year

as well. The message to take away

from this is we are entering a

period of normality, normal

identitiesation and that can only be

a good thing.

And what about who is

making the money, who is getting the

benefits of the growth, is it the

richer getting richer?

One of the

bigger economies that we have seen

throughout this whole cycle is what

is happening to real wage growth. It

is not just in the UK, but globally

and we have got very tight labour

markets, not just in the UK, but the

US as well and there are signs that

we're getting tight labour markets

in the eurozone as well. We're not

saying wage growth come through yet

and that's going to be the key thing

to focus on this year and that's

going to be the key thing that

improves living standards.

All

right, Dean good to see you as ever,

thank you for coming in, thank you.

Let's take a look at some of

the other stories making the news.

French officials say China has

placed an order for a 184

Airbus A320 airliners

on the final day

of President Emmanuel Macron's

visit to the country.

Final details of the deal

are in the process of being worked

out with the Chinese authorities.

Boeing says it delivered a record

763 jetliners last year -

which means it's likely

to retain its title as the world's

biggest plane-maker.

The firm says it also

received more than 900 net

new aircraft orders last

year worth $135 billion.

Shares in Kodak soared nearly 120%

after it revealed plans

to mint its own crypto-currency.

The US firm says it will be working

with Wenn Media Group

to launch the Kodak Coin.

It has also given details of a plan

to install rows of Bitcoin mining

rigs at its headquarters in the US.

Apple has announced that its iCloud

services in mainland China will be

operated by Chinese company GCBD,

from next month.

It says the partnership will allow

Apple to "improve the speed

and reliability" of iCloud services.

But there are concerns that the step

will give Beijing more opportunity

to monitor its citizens and others

living in the country.

Our China correspondent,

Robin Brant, joins us from Shanghai.

Robin, what can you tell us?

Well, it's another sign of how

important China is to Apple's

strategy. Going forward as it tries

to strengthen even further. We had

confirmation today of an

announcement in the middle of last

year that Apple's iCloud services in

mainland China will be essentially

handed over to a company linked to

the Government down in the south of

China and this company GCBD will run

Apple's iCloud services in China and

that means there is going to be new

terms and conditions. In an e-mail

sent out to iCloud users in China,

those who have Chinese accounts, it

warned them that they should look at

the terms and conditions and said

photographs, documents and any

back-ups will be subject to

different terms and conditions by

the end of February and it said

anyone who might not be happy with

that, could deactivate their account

or change it to a different country.

This is just the latest sign of

Apple having to comply, it says,

with Chinese regulations and the key

regulation here is that any firm

wishing to provide cloud computing

services must have the servers based

in China and they will be subject to

Chinese laws and rules, laws and

rules which some critics say are

different to regulations say in the

European Union or in the United

States.

What do we know about GCBD?

Well,

GCBD is a partnership, Apple

describes. It is owned by the

Government. It is a place that wants

to become the big data centre of

this country, but the issue for many

critics this is an entighty of the

Chinese government, the Communist

Party as well and they think it is a

particularly sinister turn of

events.

Robin, thanks.

Another record close in the US,

for the Dow, S&P and Nasdaq.

But that hasn't carried

through to everywhere in Asia

where many markets are slightly down

except for Hong Kong

which has risen slightly,

helped by energy shares climbing

with another surge in oil prices.

Let's look at the European markets,

the FTSE up slightly. The others

down.

Samira Hussain has the details

about what's ahead

on Wall Street Today.

On Wednesday the US Labour

Department will release export

and import prices for December.

Now, these measures show how prices

of a market basket of goods

in international trade change

from one month to the next.

Now, these numbers are used

to predict possible future

inflation, to set fiscal

and monetary policy,

to measure exchange rates,

forecast futures prices and,

of course, to negotiate

trade contracts.

Now, the import prices are expected

to have increase by 0.5%

in the month after a rise

of 0.7% in November.

Export prices are likely to have

risen 0.3% in December,

compared to a 0.5% rise

in the month before.

Home-builder, Lennar, will report

higher profits and revenue

for the last three months.

The improving job market has been

lifting demand for housing

and investors will be looking

for comments on the impact of

changes in tax laws on home sales.

Nandini Ramakrishnan

is Global Market Strategist at JP

Morgan Asset Management.

Thank you very much for being here.

So you want to talk about

unemployment in the eurozone first

of all?

Yes, it was released

yesterday with a significant fall.

If you look at it on the month it

fell 08.1% -- 0.1%. It is the

largest fall in unemployment over

the past 12 months in the eurozone.

That means in real terms that people

are employed more than ever in the

eurozone. Good for consumers, good

for confidence and retail sales, the

more people are in work, the better

the economy does. That's one of the

reasons we like the eurozone.

Something good for France on the

closing day of that Macron trip to

China?

The Airbus deal.

184?

A lot

of money on the table there if it

gets finalised. A big, big symbolic

thing as well for France because the

Macron presidency was based on

making France a leader in the

business world and making it more

efficient for global business and if

the deal goes through with China,

the leading economic fire house of

the world then that could be big.

That gift of a horse has really paid

off.

It could be.

Oil prices sitting

at a three year high?

First, we have

to remember that the production has

been cut. So, the reason why the oil

price fell in the past few years

because the producers were pumping

oil into the markets and the price

was pushed down by that over supply.

Now we have the producers pulling

back a bit, we are seeing a higher

oil price and some of the highest

levels we have seen in the past few

years and while that's important for

just the oil price, it is important

for the countries and economies that

export that. They're in a better

position because they can get more

money off the sales, but the people

who buy that. So it will be

interesting to watch.

What do you

make of this World Bank report about

economic growth.

I think it is

emphasising what we have been saying

for a while, growth is looking good

around the world for the first time

since the economic crisis, we are

seeing every economy in the globe

growing and that's huge. In 2009 if

you look at the map, most economies

were shrinking.

Good to have you on.

Thank you very much.

Still to come, we'll be

joined by Nadja Swarovski,

the first ever woman to be appointed

to the executive board of Swarovski.

You're with Business

Live from BBC News.

The UK's second largest supermarket,

Sainsbury's, has raised its profit

guidance after record sales

during Christmas week.

Sainsbury's said it now expected

annual profits to be up

to £20 million better than expected

despite supermarkets facing

a "challenging" market.

The chain sold 1.1% more in the 15

weeks to 6th January,

with grocery sales up 2.3%.

Joining us now is

Neil Wilson, senior market

analyst, at ETX Capital.

Welcome to you. So how have they

managed to do it?

I think

Sainsbury's have enjoyed the uplift

from the trend that we saw in

December. We saw the figures showing

that Britons spent £1 billion over

Christmas. Whilst the like for like

sales growth was decent at 1.1% and

ahead of expectation it is lagging

competitors. We saw Morrisons at

2.8% and we have seen the German

discounters Aldi and Lidl, they saw

sales increase by 15%. 16% over

December, so whilst the top end

growth looks decent, there is still

the relative values maybe not there.

But food inflation presumably

playing into the figures in a

significant way as well.

That's

right. I think what we haven't seen

today is the details on margins and

we know in the first-half, the

margins at intoes collapsed from

2.5% to below 2% and I think that's

really something that needs to be

addressed. Clearly, there is a lot

of pressure with food inflation as

you say, and that does flatten the

top line sales. It is easy to

generate higher sales when the

prices are going up, but retail is

all about margins and if intoes

isn't improving its margins it is

not doing as well as the top line

figures suggest.

Neil, thank you

very much indeed for joining us.

Thank you.

Govia Thameslink franchise is not

providing value for money. The

largest rail franchise has not

provided value for money. Passengers

have suffered the worst rail

disruption in the UK according to

this highly critical report. It

found the services had been the

worst on the network since Govia

Thameslink took over the route. The

Department for Transport said the

disruption caused a shortage of

train crews and blamed not for

having adequate staffing. It had too

few drivers when it was awarded the

franchise in the first place.

You're watching Business Live.

Our top story:

The World Bank says it expects

the global economy to pick

up speed this year

and to operate at close

to full potential for

the first time in a decade.

For over a century, the Swarovski

name has been synonymous

with luxury crystals -

the Austrian firm supplied crystals

for Queen Victoria's dresses.

It was founded by Daniel

Swarovski in 1885.

His great, great grand

daughter Nadja Swarovski

made history in 2011,

by becoming the first woman to be

appointed to the executive board.

She oversees the brand

strategy of Swarovski's

$3.8bn global business,

working with the fashion industry

and designers to keep

crystals contemporary.

Nadja Swarovski joins us now.

I went to a gallery just before

Christmas and I saw some art using

the crystals, you are branching out.

It is a multifaceted product and I

was proud to see it used in such a

beautiful way. It can go into a

different direction but this is what

we are trying to do, to steer

designers into the right direction

in terms of the use of crystal.

Take

us back, in its heyday it was of

course used by the fashion houses of

the day and then it fell into

decline in terms of its usage there

and became really well-known for

crystal animals in the 70s. What

happened, how did that happen and

how did you resurrect it so

successfully?

They heyday was the

late 40s and 50s when we saw style

icons experimenting with fashion and

different materials within their

fashion and I have to say it was my

grandfather who work very closely

with them. I heard stories by him of

working with these people and

eventually when I found myself

joining the company you are right it

was all about the crystal animals

which was wonderful because I

appreciate how hard it is to make

those crystals but I felt the

heritage was not properly reflected.

So I think the decline happened

because perhaps there was the

inappropriate use of crystal and as

mentioned it's so important to

implement the crystal in the right

creative way to find the right

creative expression in order to be

beautiful.

How do you contain that

and control something like that

without actually restricting the

obvious growth you looking for?

You

try to lead with a good example and

the way we brought ourselves back to

the forefront of fashion was by once

again teaming up with people like

Alexander McQueen who brought us

back into the rightful position. You

use people like that to demonstrate

the creative merit of crystal and

hopefully the industry follows and

that was the case with Alexander

McQueen. Our challenge is to

continue to find innovative

designers that inspire the rest of

the industry, whether it's fashion,

jewellery, architecture or art.

You

have five quite the path in terms of

running the company, when you took

over you had challenges within the

company itself to drag it in the

direction he wanted to go.

It was a

challenge but if your last name is

the name of the company you

certainly feel a strong motivation

to position the product in its

rightful way. I have to say it's all

has been very inspirational to see

how the market responded, not just

creatively but also financially and

we see it very often when we have

standing initiatives that the

financial rewards follow. Therefore

it's important for us to demonstrate

a very good position creatively.

Tell us about your background, did

you go straight in?

Absently not, my

father was in charge for 44 years as

was my grandfather and every

conversation was the business so I

thought I don't want to work in the

business. It wasn't until I studied

art history and find my path in

fashion I actually knew about the

company and I realised what I could

contribute.

The founding principles

of your great, great, great

grandfather, presumably you have

followed those to keep the

continuity going.

Absolutely, I grew

up in an environment of hard-working

people passionate about what they

have created, my great, great

grandfather was the first to use

electricity to power his machines,

eventually moving to Austria were

used hydro electricity in 1895 which

was so cutting edge. That is what

made the company as big as it was.

This is the challenge today, how do

we keep up the innovation, what do

we do and how do we implement our

technology to create a product which

is totally irrelevant to the

consumer and in powers the consumer?

Tell us about that, you have created

this crystal mesh?

Yes, it was

another material, metal on top of

which we applied the crystals, so

it's like a fabric, it's very fluid,

you can use it in jewellery and

clothing.

I long does it take to

make?

It is a very tedious process

but in a nutshell, how long does it

crystal mesh? We melt the crystal,

we melt the glass in tonnes and then

it goes into smaller moulds and they

are cut, then eventually they are

sorted out by quality, so it's a

long process and very tedious and

intricate.

Really good to talk to

you, I actually wrapped up one of

your bracelets last night to give to

as a gift to somebody.

I really hope

that person feels empowered.

Thank

you for coming in.

Now, they may be out

of the reach of you and I -

but a report out today suggests

that the market for

superyachts is booming.

One particular winner in the global

race to attract billionaire dollars?

The British yachting industry.

For more, our business

correspondent Kim Gittleson

is at the London Boat Show.

I bet there are some beauties there.

It's quite astounding, I am

surrounded by some of the most

expensive boats and yachts on the

planet. Anything less than 24

metres, around 80 feet is just a

yacht, not a superyacht these days.

One of the biggest benefit trees has

been the British board and yacht

industry, report this morning

suggesting cells in the past year

have increased by 3.4% to £3.1

billion or around $4.2 billion. One

reason is the weaker pound as a

result of Brexit making a lot of the

boats here more to international

buyers. I will be here all day

looking at over 300 exhibitors to

try to figure out what you get if

you buy one of those yachts or

boats. Stay tuned for more.

Thank

you very much. I'm not sure what the

cheapest one is. I don't think it

would be in either of our price

ranges!

Nandini is back to

look at the papers.

We have got a story, I am tried to

get it on the website, it's about 5p

plastic bags at the moment it's only

big shops that do that but they

might extend it to corner shops and

smaller operations.

It's

interesting, the government says the

5p charge on bags has reduced usage

by 90%.

It's been huge. In such a

short beaded of time.

I think that

is the key, as an economist you'd

think by P is not as much as what

you are buying but it's the extra

cost which deters people from

wanting it, so I think the logic of

it applies to more stores, different

bags, there could be success is no

long term.

Is there any concern

about where all this money goes?

It

does not seem it's a huge part of

this story. I think the general

sense is it is to reduce waste and

be better for the environment and I

think broadly you could say most

people would be on board with that.

There is a huge backlash about all

this waste, we did a story about

copy cups the other day but I think

people are generally on board.

Everyone wants to do their part.

It's simple if you don't want to

play on a plastic bag take your own.

Or easy cloth bag. Or a trolley.

Toyota and Mazda picking Alabama for

a big investment, 1.6 billion.

They

are thinking about starting a new

venture in the US state of Alabama,

it would produce 200,000 vehicles

per year which is huge. Definitely a

big thing for a country like the US,

we think about with the UK and

Europe as well, not known for

manufacturing, it's a dying or a

weekend part of the economic space.

Where does this play into Donald

Trump's views about Japanese cars

and tariffs?

I think the fact it's

been made in America and

manufactured in America and will

employ 4000 people in a state which

is not always at the top of economic

output lists could be very good for

the campaign promises as well as

just bringing up different parts of

the US economy to catch up with

other parts.

Bad news for North

Carolina, interesting in terms of

what the states could offer in terms

of supply chains.

Yes a lot of

competition in American states but

on the whole it looks like it would

be good for the US and certainly

symbolises the sense of

manufacturing and global trade

happening more and more.

Do you

think big companies do want to play

ball with Donald Trump, they are

listening to what he said?

Yes,

political or maybe social use a site

he is the leader of one of the

largest economies in the world which

has a lot of manufacturing power. As

well as global presence. People care

about what America does and makes.

I

was wondering if this would change

any domicile line of companies

bearing in mind the tax reforms

which have gone through.

That

something we are looking at, which

could boost a lot of American

companies and has been one of the

reasons we like American equities,

it's a complicated tax loss we have

to see how it affects various

companies, if they are domiciled in

America are not, it should be an

interesting year for companies.

And

the best option is to be stateless

and not pay anything anywhere! Good

to see you, thank you. Goodbye for

now.