23/01/2018 BBC Business Live

This is Business Live from BBC News,

I'm Ben Thompson in London,

and I'm Sally Bundock in Davos

at the World Economic Forum.

Optimism about the global economy

is at its highest level in years

according to the world's

top business leaders.

Live from Davos and London,

that's our top story

on Tuesday 23rd January.

Despite that pick-up in the global

economy the US approves

controversial tariffs on Chinese

solar panels and South

Korean washing machines.

We'll get the latest

live from Shanghai.

Also today: UK regulators

block Fox's bid to buy

satellite broadcaster Sky -

it throws the $16bn deal into doubt.

And markets power to new highs

after the US government deadlock

is resolved for now.

We'll assess what happens next.

And with India's Prime Minister

Narendra Modi the keynote speaker

here at Davos today, we get the

inside track from atop Indian boss

who leads an IT services company to

find out what he is hoping for. As

usual, we want you to be a part of

the conversation. As global leaders

in politics and business gather here

to solve the challenges facing the

global economy, what one problem

would you like them to solve? Use

the hashtag BBCBizlive.

Hello and welcome to Business Live.

The prospects for the global economy

are at their brightest for nearly a

decade. That is the view of business

leaders and the International

monetary fund. They have both

launched their latest forecasts at

the World Economic Forum getting

underway in Davos. It is the

get-together of the top business

leaders and politicians in the

world. What are the latest figures

say? The IMF has raised its growth

predictions for the year to come and

next year. They have raised them to

3.9%. It says that reflects growing

momentum, and President Trump's

recent tax cuts have given the

economy a boost. IMF says that

optimism is being felt around the

world, 120 countries, representing

75% of the world economy, are

expected to see stronger growth in

2017. Business leaders have noticed

that 57% of the world's top bosses

think that growth will improve in

the next year, according to a

survey. That has been reflected on

stock markets oblate around the

world, setting new record highs

since last year's Davos gathering.

Let's had there now. Sally is

braving the cold. Normally when

we're talking about Davos, it is

about how we repair the world

economy, but this time, the message

is very much, it is on the men.

Absolutely. That's definitely the

message we've had so far here. You

talked about what the IMF had to say

about the outlook for 2018, on top

of that, you have mentioned the

survey from PWC about business

leaders being the most optimistic

they have been for years. Here, they

are well aware of the challenges we

are facing. In fact, the theme is

all about how to create an

environment where we are sharing in

terms of trade, expertise, in our

fractured world. When they talk

about the fractures in the world at

the moment, there are lots of

issues, of course, but the main one

is the thinking about the US and the

actions of President Donald Trump.

Today, we have already seen some

action in terms of protectionism,

you could call it - fresh tariffs

slapped on steel products coming out

of Asia, and pretty substantial

tariffs, too. Let's get more detail

on that from Robin Brant in

Shanghai. Interesting, Donald Trump

will be heading to Davos in just a

few days, and here, the talk is all

about global trade, and yet,

barriers are going up.

Yes, they

are, and President Trump is living

up to his campaign promises. For the

next four years, we have tariffs on

solar panel goods going from China

into the US, with a 30% tariff.

Washing machines coming out of South

Korea, $1 billion a year in trade,

will face tariffs of up to 50% going

into the US. This looks like, and it

is, the beginning of a trade war

between the United States and its

long-term ally, South Korea, and its

rival, as you might describe it,

China. The Chinese Government won't

be surprised. A campaign promise,

but in reaction, it has expressed

its strong dissatisfaction at Donald

Trump, saying it believes the US is

now a threat to the international

trading system. Will it hit the

Chinese solar panel industry? Well,

it is their biggest in the world,

but there is a glut in supply and it

is likely that the slight will be

picked up by manufacturers outside

of China, perhaps in places like

Malaysia. It is no doubt it will

have an effect on Chinese

manufacturers. One slight irony,

this time last year, China's leader

was in Davos is trying to be the

champion of global trade. That is

something some people think he

achieved. Some people think Donald

Trump is helping him to achieve it.

OK, Robin. Thank you very much

indeed. Add very interesting story

developing on that front today. More

analysis on that. Kamal is with us

in Davos. Robin just making the

point that last year, the big

keynote speaker was President Xi Jin

Ping. This year, we are talking

about Donald Trump, and the two of

them are in a spat about steel.

These increased tariffs set up the

arrival of President Trump on

Friday. As you say, what a contrast

with this time last year, Xi Jin

Ping talking about globalisation. He

is the first president to visit the

economic forum since 2000 and Bill

Clinton. Will he be telling the

world comedy with America's wait

while we will go it alone? From what

we have seen today, it looks like he

will be heavy on protectionism and

the America- first time. A pretty

aggressive message for the

delegates.

It is interesting,

because among the speakers today, we

have the prime minister of Canada,

Justin Trudeau, and we are hearing

about steel tariffs being slapped on

Asian economies today, but the North

American Free Trade Agreement is a

big issue, and we know that

President Trump is talking about

renegotiating that completely. It is

all about these trade agreements

around the world that are being

renegotiated or completely changed.

You're right. I think from Prime

Minister Trudeau line from the

renderer Modi -- Narendra Modi, you

will get a different message from Xi

Jin Ping last year, which was that

globalisation was the way to lift

people out of poverty and create

global growth. President Trump is

going on a different line. He says

that being aggressive on

protectionism means that he can

protect American jobs. And so far,

the jobs market in America has been

very strong. The upgrade of US

growth has been strong, though not

the strongest in the world. So there

is this division in approach, and I

think that sets up the big tension,

the big debate, at the World

Economic Forum, which we will see

played out over the next few days.

Kamal, thank you very much indeed.

That is it from us just for the time

being. I will rejoin you in a few

minutes.

Thank you very much, Sally.

We will be back with you in a moment

or two.

Let's take a look at some of

the other stories making the news.

Low cost airline easyJet

says revenues are up

14% to £1.1 billion -

that's just over $1.5bn -

for the last three

months of last year.

Its cost per seat -

a key measure of performance -

had fallen by 1.6% thanks to lower

fuel costs and cutting other costs.

Passenger numbers were

also up at 1.4 million.

The boss said that was

because they were offering "better

quality options" to their customers.

The world's second largest retailer,

Carrefour, plans to cut 2,400 jobs

and expand its e-commerce business.

The company will invest $3.4 billion

in its online platform amid fierce

competition with Amazon.

Carrefour has also announced that it

will partner with the Chinese

internet giant Tencent.

Bacardi will buy tequila maker

Patron in a deal worth around

$5 billion as it looks to expand

in the US and cash in the growing

taste for the Mexican spirit.

Sales of tequila have been

climbing in recent years,

while other alcohols like vodka

and brandy have

fallen in popularity.

The deal will make Barcardi

the second largest spirit company

in the United States.

The UK's Competition regulator has

ruled that Fox's proposed

takeover of Sky is not

in the public interest.

It says the deal would give

the Murdoch family too much control

over news providers in the UK.

Andrew Walker is following

the story for us.

Andrew, we were waiting for this

ruling, won't we? It is an

interesting one, and they say it is

not in the public interest?

The

Competition and Markets Authority

looked at this proposed takeover.

One basis was broadcasting

standards, and it was happy with the

implication standards. But on the

question of media plurality, it was

not. It takes the view that the

Murdoch family would have access to

about 30% of the UK audience, and it

regarded that as excessive. It

proposes a number of possible

remedies, not coming down in favour

of any particular option at this

stage. One is to prohibit the deal.

Another is to look at the idea of

spinning off Sky News, and a third

one is what it calls a behavioural

remedy, which would be some sort of

system for ring fencing Sky News

from the rest of the Murdoch

business.

Andrew, thanks very much.

I know you will stay across that

story for us. In the early minutes

of trade, Sky shares are unmoved by

that.

Tokyo's Nikkei index closes

at a 26-year-high in Tokyo,

after Wall Street powered to another

set of records following a deal

to end the US government shutdown.

Investors confident the deal

will keep the government

funded in the short term,

and it's unlikely to have a lasting

impact on the US economy.

That is the current state of play in

Europe. We have had an update one

networks overnight, saying that

subscriber numbers are up even

though it has raised its prices.

If

you have heard of The Crown And

Stranger Things, They Are Part Of

The Reason Why Networks Profits Are

Soaring. The Streaming Service Has

Been Investing More Money In

Original Programming, Meaning It Is

Short On Cash.

In The Last Three Months, Networks

Added More International Subscribers

than it expected, more than 6

million. It added more than 8

million subscribers globally.

Networks is now worth about $100

billion and has more subscribers

than other streaming services like

Amazon, which means is only a media

company with deep pockets could

really compete with networks.

Never a truer word spoken - deep

pockets to take on networks.

Joining us is Trevor Greetham,

head of multi-asset

at Royal London Asset Management.

Things are on the up. Yesterday,

markets didn't move a huge amount.

They thought, we have seen a US

shutdown before, we're not too

bothered, but they like it now that

it is over.

The American stock

market is up 25% year on year now.

Is it just moved over the 25% mark.

The markets like the strong global

growth we have been hearing about

from Kamal and the IMF, so we have a

strong global picture, but at the

moment, inflation is low. The

question for 2018 is whether

inflation will spoil the party.

Let's bring in Sally from Davos.

Hello to both of you in your cosy,

one studio! I wanted to but in,

Trevor, at this point. Nice to see

you. I wanted to ask you about that

issue and what Kamal was saying, but

also, it was surprising how

optimistic business leaders are, the

1300 that PwC spoke to all over the

world. They spoke to those business

leaders before the US tax reforms

were cleared and agreed upon, and

yet, they are talking about hiring

and investing. The majority of them

are extremely optimistic. Your take

on that?

It's not that surprising,

because you have very low interest

rates, and you have this big tax cut

in terms of the headline corporation

tax rate, the biggest in American

history. At the moment, it looks

like this expansion can continue. It

is an eight and a half year

expansion, making it the longest in

history, and if inflation doesn't

pick up this year in a big way,

interest rates will stay low and it

will carry on. It could even

challenge the 1990s, which was a

10-year expansion. The question is

whether tax cuts create inflation,

and whether the slowdown in China,

which is not getting much coverage,

pulse commodity prices down again

and gives us a breather for another

year or two.

It will be one to

watch, how long that sugar Rush can

continue. Trevor, thanks very much

for now. Sally, you've got a guest

there in Davos.

I do. Indeed I will

be talking to the Chief Executive of

a company. We have got the Prime

Minister of India as the keynote

speaker here today. It is the first

time an Indian Prime Minister has

been here for a few years. We want

to know what are the top bosses in

India looking for from those in

charge of India? See you soon.

You're with Business Live from the

BBC.

UK bookmakers are bracing

themselves for a hit later

when the Government concludes

a review into tackling

problem gambling.

Shares in bookmakers William Hill

and Ladbrokes Coral slumped

yesterday on reports

that the maximum bet on some

gambling machines could be cut

from £100 to just £2.

Richard Hunter is head of markets

at Interactive Investor.

Richard, talk us through this. The

Government says we need to clamp

down on problem gambling. This is

the way they think they can do it by

reducing the amount people can

spend.

It is around fixed odds

betting terminals which are in place

in shops around the country. At the

moment the maximum stake is £100.

There has been a government

consultation is it will be curcts

but it could be anywhere between £2

and £50 which is an extremely large

spread. There was a report in a

newspaper at the weekend suggesting

that actually it was the £2 end of

the spectrum that we should be

expecting and so the share prices of

the likes of Ladbrokes and Coral and

William Hill took a beating. The

estimation is should this go

through, ie the £2 level it could

take around 25% of both of their

revenues.

It is an emotive issue

this, isn't it? Clearly the betting

firms are ones that really cash in

on people that maybe shouldn't be

spend that money, can't afford to

spend that money and that's where

they make their profits?

Yes, that's

right. There has been similar moves

in Australia which is of interest to

William Hill for example where the

ability to lend on credit so that

you could gamble is now a loophole

they are trying to shut. Obviously

from the bookmakers point of view in

the UK, what they are arguing is

that should the £2 levy be

introduced directly that will affect

a great number of betting shops

around the UK, they will need to

close which obviously will result in

the loss of a number of jobs and a

lesser tax take for the Treasury.

Richard, thank you for explaining

that. It is one we will watch

closely and shares actually in the

two biggest in the UK actually

opening up marginally at the moment.

I want to show you news on the

Business Live page. There is further

deals about the Sky deal. It raises

questions too for the proposed deal

with Disney. The full details are

there on the website.

You're watching Business Live.

I'm Sally Bundock.

I'm Ben Thompson

in London.

Our top story: The United States has

approved controversial tariffs

on Chinese solar panel

and South Korean washing machines.

Both countries have

criticised the tariffs.

Sally talking about the growth

forecast for the world economy being

upgraded off the back of the tax cut

in the United States. A quick flash

at how the markets in Europe are

faring in early trade. The boost on

Wall Street after the deadlock in

the United States was broken with a

last minute deal yesterday. We see

markets following the lead of Wall

Street and indeed, Asia, opening up

pretty sharply.

Now, let's take a

look at today's events in Davos. The

keynote speaker today, in a few

hours, is the Prime Minister of

India. How critical is it to Indian

businesses that he is present here

at Davos? Well, I'm joined by it the

Chief Executive of an IT services

company in India. Welcome to

Business Live. So, how important do

you think it is that the Indian

Prime Minister does come to Davos,

the first time for many, many years

that an Indian Prime Minister has

been here.

I think Prime Minister

Modi represents the new set of

ambition for India, aspirations of

India and he is now the leader of

almost 300 CEOs and politicians and

NGOs and different parts of the

Indian society, 300 plus people who

are here in Davos today. Who better

than Prime Minister Modi.

Now, he

has been very sort of proactive

since he has come into power as

Prime Minister in terms of talk

talking about trade with many global

leaders, notably the likes of

Theresa May and others. Clearly,

he's keen to do global trade deals.

To what extent do you feel his

presence here this year is

overshadowed by that of US President

Donald Trump who is coming in a few

days' time and of course, Trump

today announcing new tariffs?

You

know, the reality is that I think

the two book ends of Davos, the

beginning has been done by Prime

Minister Modi and the closing would

be done by President Trump. We

couldn't have had a better Davos, so

the delegates, I can only say,

getting President Trump here,

talking about his own tax reforms,

his own policies and the road ahead

and particularly as we know he's

going to do a lot of investment in

infrastructure, he is coming in

towards the end and Prime Minister

Modi...

You are a global company. I

mean you work over the world, in

Sweden, in Switzerland, the United

States, Italy and Israel to name a

few. How concerned are you about the

actions of the United States in

terms of putting up tariffs. Today

we are hearing about tariffs on

Asian steel products, but are you

worried that this could sort of set

a wave of protectionism across the

globe?

That global trade has always

had some entry barriers. I mean WTO

has succeeded, but not fully

succeeded. That we have always seen

is anti-dumpling duties in the

previous regimes also. That current

President Trump wants to use his

muscle to negotiate better

agreements in global trade. They are

being upfront and they are more

vocal about it. I am concerned, but

I would not say that it is not in

the best interest of the US to allow

Indian visa holders.

And what are

you hoping to gain from being here

yourself? What does this event mean

for you and your company?

Many

things. Number one is being able to

interact and you know, make sure

that the vision is alined with the

other powerful, if not, all, but at

least 100 odd CEOs that I will

interact with.

All right. So there

is a lot you want to achieve and we

must let you get on with that, but

thank you for taking the time to

talk to us on Business Live. The CEO

of a IT company.

Trevor Greetham from

Royal London Asset Management

is joining us again to discuss.

This is a backlash against social

networks?

The big tech companies,

they are used to being the

disruptors of the status quo, they

have become so big now that they

have become the status quo and they

are having to spend money on

removing offensive content and there

are a lot of things that are

challenging them, but they are

growing rapidly.

I suppose the

backlash is on so many sides. It is

about what we use the social

networks for and whether people are

using them for the wrong reasons,

spreading extremist content, but

things like tax and that's where it

really hits them?

It does. The fact

that most of the big entrepreneurs

of big tech say things like, "I

don't let my children use Facebook."

." They are going through an

interesting phrase of development,

but there is more to come from them.

A quick look at this We Work. It has

become Central London's biggest

occupier.

This is people just

wanting to hire a desk and these

companies like We Work are buying up

office buildings and renting out

desks. You can't tell how much spare

capacity there is in the office

market in London because these guys

buy it up and maybe their buildings

are half empty, we don't know.

Trevor, Todd for explaining that. It

is one we'll keep a close eye on.

Sally, we have been asking what

people like to see changed in Davos.

Bob says climate change and I bet

you feel that in the cold there.

Another viewer says inequality. What

are people talking about there?

Inequality is a big issue on the

agenda particularly when it comes to

women empowerment and getting more

people in the workforce, but you

will hear from me in the hours ahead

so I will talk some more about that

later.

Stay warm. Nice to see you.

See you back here very soon. From

all of us on the team, thank you for

watching. Have a great day. Bye-bye.