12/01/2018 BBC Business Live


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12/01/2018

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This is Business Live from BBC News

with Jamie Robertson

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and Samantha Simmonds.

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Open Banking is set to shake

up the way we bank -

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but will you be happy with tech

companies looking after your

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financial data in the future?

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Live from London, that's our top

story on Friday 12 January.

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The Open Banking revolution.

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New rules will give consumers

control of their own financial data

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- making shopping around easier -

and challenging the power

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of the big banks.

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Also in the programme:

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Facebook has announced big changes

to how its news feed works.

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With the aim of making

posts from businesses,

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brands and media less prominent.

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Is the social media site

returning to its roots?

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And as it's Friday we'll be getting

the inside track on the big stories

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of the week with our business

editor, Simon Jack -

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looking at the price of oil,

Brexit and the impact

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of President Trump's

cancelling his UK visit.

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And as Facebook announces its going

to make posts from businesses

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and brands less prominent,

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today we want to know if you think

these changes mean that the social

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media site is returning

to its roots?

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Let us know.

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Just use #BBCBizLive.

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Hello and welcome to Business Live.

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We start here in the UK -

where tomorrow will see the start

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of a revolution in the way

we manage our money.

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It's known as Open Banking -

and it will soon be rolled out

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across Europe, giving more power

to customers and potentially

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weakening the power of the banks.

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So what is it?

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At the moment your financial data

is held by your bank.

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But under new rules,

ownership of this data will be

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transferred to the consumer.

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This will allow you to share it

with other companies to see

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if they can give you a better deal -

on anything from overdrafts

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to mortgages and loans to insurance.

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Open Banking has already been

welcomed by some consumer groups -

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as a way to bring more competition

into the market

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Others though are uneasy

about what might happen to all this

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previously private financial data.

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They worry about security - and

dealing with unknown third parties.

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It could also could pose a major

threat to traditional banking.

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One report claims almost a third

of European banks' profits -

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some $35 billion a year -

are at risk from new rivals

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in the financial technology

or 'fintech' sector.

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Jeremy Light, Accenture Managing

Director of Payment Service, Europe,

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Africa and Latin America is with me.

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Thank you for coming in, how huge is

this change?

I believe this will be

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the biggest revolution in banking

since the big band in the city in

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1986. That was about investment

banking and stockbroking but this is

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about retail banking and high street

banks.

How keen do you think

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customers will be to take up the

offer of selling out financial

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detail, giving you access to two

other companies, people like me who

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have had the same bank account since

I was 18, I would be concerned were

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that data would go.

It will take

time, we will not see a lot of

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activity over the next few months

but over the course of the year

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we'll start seeing new propositions,

for example, able to pay directly

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out of your bank account on retail

websites without using cards. You

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can load your banking information

into product comparison websites to

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get the best deal for current

accounts and accounts. And a lot of

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consumers, 20 or 30% of them have

accounts at more than one bank and

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you will be able to see all those

accounts in one place, the balances,

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the transactions are new will have

apps which will do spread analysis,

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identified deals and so on.

For

instance if I want to get a mortgage

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at the moment I go on to different

websites and compare the different

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prices, how will it be different

from that?

At the moment the easiest

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way to get a mortgage is from your

own bank because they know you and

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have your data and can make a quick

decision on what you can afford. You

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can go to other banks and building

societies but you have to give them

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the data, statements, download them

or e-mail them, and then you have to

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sit down with them to explain what

your income is and what you spend

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your money on and so on. With open

banking you can do it at a press of

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a button. You can see it gives the

consumer a lot more choice, I'd take

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things out of the process.

What

happens when you press the button?

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The bag get access to your bank

account data, up to two years of

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transactions, they can see your

income, how you manage your money in

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terms of keeping in credit are

having an overdraft and so on.

How

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concerned are banks about this

because initially they were quite

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reluctant, they had to comply with

the law now, will it damage them or

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is it going to open up fresh ideas

and new business.

If they embrace it

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it's a huge opportunity. It is an

opportunity to allow third parties

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to in effect distribute their

products. The biggest change with

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open banking is in addition to the

edition ways of banking, Mobile, the

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Internet, and branches. You can do

your banking outside of the banking

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environment. Make payments on retail

website, go on to social media and

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make payments, see all your accounts

in one place. If banks are

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discoverable, it's a bit like in

other industries, like, say, with

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travel. You can buy a ticket on an

airline website or a hotel but they

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are discoverable on apps like XP

they are and so on and you can, by

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being on there, those airlines and

hotels are actually helping

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distribute the products so it'd be

the same with banking.

Big changes

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ahead, great to see you.

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Let's take a look at some of

the other stories making the news.

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Facebook says it will

change its focus -

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to emphasize what it calls

'meaningful social

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interactions' between friends -

rather than posts from media

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outlets and businesses.

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The social network has faced

criticism over fake news

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and being too addictive.

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The chief executive Mark Zuckerberg

has warned it might hit the business

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in the short term but would be

better for the company

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and the community in the long term.

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The US carmaker Fiat Chrysler says

it will invest $1bn in its plant

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just outside Detroit so that it can

move production of some

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pick up trucks there.

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The vehicles are popular in the US

and are currently made in Mexico

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but that could atttract hefty taxes

if President Trump pulls out

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of the Nafta free trade deal.

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The Mexican factory will now make

cars for the rest of the world.

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There's been a breakthrough in talks

in Germany on forming

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a new coalition government.

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Chancellor Angela Merkel's Christian

Democrats and their former coalition

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partners, the Social Democrats,

had been working through the night,

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in a bid to strike a deal.

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They've now agreed a basis

upon which a coalition

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treaty can be negotiated.

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The latest from Reuters is that

parties are prepared to boost German

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contribution to the EU budget which

is a sticking point.

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Our Berlin corresopondent

Jenny Hill joins us now.

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Bring us the latest?

Yes it looks as

though Angela Merkel's dinner seems

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to have helped clinch the deer after

gruelling overnight talks which

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appear to have got blocked up over

policy areas like finance and

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predictably of course refugee

policies. Angela Merkel has not

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emerged, when she does it will no

doubt be with a smile, this comes as

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a huge relief as she was running out

of options on how to form a stable

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government. But she's not out of the

woods just yet. This is German

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politics, it is complex, a lengthy

process. These were just exploratory

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talks designed to establish whether

or not there was a basis upon which

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a formal coalition treaty can be

negotiated. So what happens next is

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a round of more detailed formal

negotiations. But before that can

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begin the social Democrats rank and

file will gather at a party

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conference later this month to vote

on whether they want to take this

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any further. Bear in mind of course

the social Democrats initially said

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they did not want to ever work with

Angela Merkel again. They changed

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their mind but there is still a deep

sense of discomfort within the party

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over whether they really want

another four years of an Angela

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Merkel government. First of all we

will see that vote. If those talks

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then proceed and it will take some

time before they can get under way,

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all 400,000 members of the SPD will

have devote any postal ballot on any

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final coalition. Angela Merkel may

be released this morning but there

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are still some way to go.

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China's annual trade

surplus with the US has hit

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a record high in 2017,

according to data

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released by China today.

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First, Karishma Vaswani

is in Singapore.

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Tell us about these figures, this

will not help relations with the US

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will it?

Absolutely, you have hit on

exactly the right point. The trade

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surplus between China and the US

according to data from the Chinese

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shows it went up by about 10% to a

record $275 billion and analysts say

0:10:110:10:18

that figure could actually be a few

percentage points bigger than that

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because some of the trade from China

to the US goes through Hong Kong and

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that is of course unaccounted for in

this set of data. A bigger trade

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surplus between the US and China is

exactly the opposite of what

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President Trump has been talking

about over the last year since he's

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been in office. This is a problem

which is only going to get larger.

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Growth United States picks up as we

expect, so Americans will buy more

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from China and as Chinese growth

stabilises or slows down which we

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expect this year as well the Chinese

are importing less from the United

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States. So what do you get? You get

an even wider trade surplus. With

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the US dollar strengthening this

year all the factors point towards

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the trade surplus getting wider. But

these figures were not the only ones

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which were interesting in the data,

China also released its trade

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figures for North Korea showing a

fall of 81% and imports. Hopefully

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that will go some way towards

convincing the Trump administration

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that China is trying to clean up the

North Korea problem.

Thank you very

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much, let's look at how the markets

have been progressing.

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Is that it's going to be a good week

for the US markets, in fact all the

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markets.

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The oil price coming off its high,

down to just below $70 a barrel, we

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will talk about that in a second,

the oil price symptomatic of a

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growing healthy global economy.

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And Yogita Limaye has

the details about what's ahead

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on Wall Street Today.

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It's going to be a busy day because

their eyes a lot happening on both

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the corporate and economic fronts.

Fourth-quarter earnings season

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starts today led by major banks here

in the US. JP Morgan Chase, Wells

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Fargo and PNC financial services

will be revealing how they performed

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from October - December. All eyes

will be on how the new tax law will

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impact these banks. Investment

manager Blackrock will also report

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earnings and there is an important

economic data to be released as

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well. Numbers for the consumer price

index, a key measure of inflation

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will be out and they are expected to

show a sluggish price rise continues

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to be a feature of American growth

stories right now, one economists,

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policymakers and even the people at

the Federal reserve cannot explain

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but they do expect it to change

soon.

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Joining us is Lawrence Gosling,

Editor-in-chief, What Investment.

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We are going to look at this

Facebook story, Mark Zuckerberg made

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it his New Year 's resolution to go

back to the roots of what he

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envisaged it as. He said he's going

to stop pushing, that's not the

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words he used, but business, I don't

know if it's going to be adverts or

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just posts, that will be

interesting, but business will have

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something to say about that because

they pay a huge amount of money.

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This is it, Facebook spent the last

few years not really bothering what

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is pushed in front of its users as

long as the advertisers are happy.

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There was a wave last year about the

mental health issues of Facebook and

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other social media platforms. They

are trying to be more responsible,

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talking about content which is more

engaging and fits in more with their

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sort of personal use at I think

we'll have to see how it emerges the

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year, it's a genuine content.

How is

my bit coin investment doing?

Not as

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good as it was...

I gladly have any!

The prize came down, the South

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Korean government the latest to

become concerned, they are talking

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about banning the exchanges that

investors can buy them, crypto

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currency through. The price coming

down from closed in 19,000 just

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before Christmas to 13,000

yesterday. Only up 1000% last year,

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would have been an amazing

investment...

If I had bought them

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at the beginning of last year you

would still be in the money.

People

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are still trying to find those old

computers they bought them in.

End

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of year results, interesting data,

the first week, the first week

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financial markets sorry, an

interesting analysis.

It's one that

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stat was like. If you look at the

first trading week of the year, if

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it is positive foresee the FTSE 100

there is an 80% chance the index

0:15:090:15:13

will finish the year up.

That is

statistical? Purely statistical.

0:15:130:15:20

Yeah, there is no great primary is

on but a big part of what drives the

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is sentiment.

You might be able to

work out if it is over clouded on

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Tuesday in the first week of the

year...

We debate if there will be a

0:15:280:15:36

stock market crash in October

because we had won in 1987.

Thank

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you very much.

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Still to come we'll be getting

the inside track on the big stories

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of the week with our business

editor, Simon Jack -

0:15:460:15:49

including the latest on Brexit

and President Trump's

0:15:490:15:50

cancelling his UK visit.

0:15:510:15:52

You're with Business

Live from BBC News.

0:15:520:15:56

Housing commentator

Henry Pryor, joins us now.

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It is interesting to see these

results. All big house builders and

0:16:320:16:39

developers, these results are

optimistic for 2018. They have had a

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dismal 2017. They appear to be

putting their house in order.

What

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about the sector as a whole? They

had a tremendous few years. Since

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2012, we saw housing stocks going

through the roof.

Jolly difficult

0:16:580:17:02

not to make money in the sector at

the moment. If you look at

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everything sitting behind housing at

the moment, the Government is making

0:17:080:17:11

huge efforts now to build more homes

and get more built and indeed they

0:17:110:17:16

are funding a party funding the

actual customers buying the

0:17:160:17:20

products. We can see there with

firms like Bovis, about 30% of their

0:17:200:17:28

transactions are taking out the

controversial Help to Buy scheme and

0:17:280:17:31

that means it is jolly difficult for

anybody to lose money at the present

0:17:310:17:35

time in this sector.

What about

house-buyers? It is certainly not

0:17:350:17:40

been good in London for sellers.

What I would call the marzipan

0:17:400:17:46

layer, the top end of the housing

market, but in the bread-and-butter

0:17:460:17:50

market things are looking actually

pretty robust across the UK. Demand

0:17:500:17:54

outstrips supply and the way the

Government is underpinning demand by

0:17:540:18:00

giving people a leg up onto the

housing market will ensure we

0:18:000:18:04

continue to see house price growth

indeed growth in the builders and

0:18:040:18:09

developers creating those homes.

Thank you.

0:18:090:18:18

You're watching business Live. Let's

look at what is on the website. This

0:18:180:18:26

is a Friday story, Chris Johnson

does admit. Users like-for-like

0:18:260:18:31

sales are at 3.9%. 225,000 meals

sold on Christmas Day. Five of 5%

0:18:310:18:39

more than last year.

0:18:390:18:45

You're watching Business

live - our top story

0:18:460:18:50

is about Open Banking...

0:18:500:18:51

New rules coming in this weekend

will give consumers more control

0:18:510:18:53

of their own financial data -

which could ultimately challenge

0:18:530:18:56

the power of the big banks.

0:18:560:18:57

A quick look at how

markets are faring...

0:18:570:19:03

They are still up.

0:19:030:19:10

A slightly weaker dollar at the

moment.

0:19:140:19:17

And now let's get the inside track

on all the big business stories

0:19:170:19:20

of the week including oil prices

hovering around $70 a barrel

0:19:200:19:23

and more Brexit developments.

0:19:230:19:24

Our business editor is Simon Jack.

0:19:240:19:31

Oil is doing pretty well?

Yes, $70 a

barrel, which is the highest for

0:19:310:19:40

three years, since 2013, we have

been as high as 110 and as low as

0:19:400:19:44

26. So we're pushing back up. There

are three things to consider,

0:19:440:19:50

demand, disruption and this claim.

In the US and Asia and the Eurozone,

0:19:500:20:02

doing well, that meant plenty of

demand and economic activity pushing

0:20:020:20:07

it up. Disruption, we have had some

from Venezuelan, Iraq, and then the

0:20:070:20:13

big one, the most interesting one is

discipline. What do they do when it

0:20:130:20:16

starts getting up? The shale gas in

the US has made a huge change in the

0:20:160:20:21

market. And it gets toward these

levels, do they start drilling like

0:20:210:20:26

mad or do they have discipline and

start paying down some of the

0:20:260:20:31

massive debts?

That is not much to

impose discipline on them, unlike

0:20:310:20:36

Opec.

Opec get-together at a big

club and try to get prices, when it

0:20:360:20:42

went low, that was seen as an

attempt to put the shale gas are

0:20:420:20:47

people out of business. But the

thing is, will these shale gas guys

0:20:470:20:51

be disciplined enough not to start

drilling like crazy and bring it

0:20:510:20:56

down? There was a report released

that says Shale operators are being

0:20:560:21:02

more disciplined and using money to

pay down large debts. All we know

0:21:020:21:07

about this oil price is about 80 is

considered too high, 40 is

0:21:070:21:12

considered too low, somewhere in the

middle at the moment... It will be

0:21:120:21:15

interesting to see whether this

affects global inflation. High

0:21:150:21:22

demand, high oil price, and then the

Fed would have to raise rates

0:21:220:21:26

quickly on the market would crash...

You have a story about banks paying

0:21:260:21:31

for EU access.

Basically, Philip

Hammond and David Davis went to

0:21:310:21:37

Germany this week and they're trying

to coax from the other side is some

0:21:370:21:41

sort of, what is about you guys

want? You keep criticising us. We

0:21:410:21:46

would like you to make us an offer.

That might include something like,

0:21:460:21:50

because they want to keep close ties

with the UK, stick around and you

0:21:500:21:54

can have access to a single market,

things like banking, I'm forced to

0:21:540:21:58

financial services. But you have to

pay for that. Banking sources say

0:21:580:22:02

this is not on the table at the

moment, the Government does not want

0:22:020:22:05

to be the one to raise it,

politically unpalatable to say they

0:22:050:22:09

will pay for single market access.

But banking sources have said if we

0:22:090:22:16

could pay for access, we might be

prepared to. Basically, our overall

0:22:160:22:25

bill to the access for its single

market is ex-building, let's divvy

0:22:250:22:31

it up between banks,

pharmaceuticals, car manufacturers,

0:22:310:22:35

and obviously we are an exporter

which is successful.

What about Mr

0:22:350:22:42

Trump? Is he coming over here?

I

have no special political insight.

0:22:420:22:49

He is saying he's not coming to open

the US Embassy in Grosvenor Square.

0:22:490:22:53

A prestige pay for a location which

has now moved to nine elms. I don't

0:22:530:22:57

want to be rude to people that live

there but does not Grosvenor Square.

0:22:570:23:02

He said he thought it was a bad deal

by the Obama administration to move

0:23:020:23:06

from a prestigious location, sell it

for peanuts and moved to this new

0:23:060:23:11

location. All I will say is that

ever since Theresa May went over to

0:23:110:23:18

be the first leader into the White

House, organising the return leg has

0:23:180:23:23

not been straightforward! There

would obviously be some level of

0:23:230:23:27

protest. People are speculating that

because the Queen will not be

0:23:270:23:31

involved and there will be bells and

whistles and golden carriages...

0:23:310:23:35

That he may well come, this is just

a cancellation of this particular

0:23:350:23:38

visit to open the embassy.

Yes,

there is a meeting planned with

0:23:380:23:46

Theresa May, I think... All I can

tell you as a -- all I can tell you

0:23:460:23:53

is that some residents in Battersea

will be disappointed they will not

0:23:530:23:58

get to see the president.

0:23:580:24:00

In a moment, we'll take a look

through the Business Pages -

0:24:000:24:03

but first here's a quick reminder

of how to get in touch with us...

0:24:030:24:12

We wanted to hear from you, get

involved on the web page. We on

0:24:160:24:25

Twitter. Find us on Facebook.

0:24:250:24:33

What other business

stories has the media been

0:24:390:24:40

taking an interest in?

0:24:400:24:41

Lawrence Gosling is joining

us again to discuss.

0:24:410:24:47

It is all about Carillion.

Yes. It

is involved in schools, motorways,

0:24:470:24:54

the Armed Forces and the HS2 ruling.

It has $1.5 billion of debt. The

0:24:540:25:04

company is only worth £100 these

days. It's an absolute mess. For the

0:25:040:25:09

Government, they have had a meeting

to figure out what they will do.

It

0:25:090:25:17

employs 43,000 people globally.

Half

of those in the UK, so is important.

0:25:170:25:24

Infrastructure is a long-term driver

for growth.

There was talk last week

0:25:240:25:28

about a bailout.

I would suspect we

will probably see a bailout. A bit

0:25:280:25:35

of Government money and a large

overdraft from the major banks

0:25:350:25:41

supporting it.

We must leave it

there.

0:25:410:25:46

That's it from Business Live today.

0:25:460:25:53

We'll see you again tomorrow.

0:25:530:26:03