0:00:05 > 0:00:07This is Business Live from BBC News.
0:00:07 > 0:00:12I'm Ben Bland in London.
0:00:12 > 0:00:15And I'm Sally Bundock in Davos, at the World Economic Forum.
0:00:15 > 0:00:20Could Europe be set for a big pay rise?
0:00:20 > 0:00:23Germany's biggest union demands an inflation-busting deal
0:00:23 > 0:00:28for millions of workers.
0:00:28 > 0:00:30Live from London and Davos, that's our top story
0:00:30 > 0:00:35on Wednesday 24th January.
0:00:47 > 0:00:51The industrial workers union normally sets the tone
0:00:51 > 0:00:54for pay across Germany - but will they end up
0:00:54 > 0:00:56helping the Eurozone wind down its stimulus programme?
0:00:56 > 0:00:59Also in the programme...
0:00:59 > 0:01:03Full steam ahead for the Pacific's free trade deal.
0:01:03 > 0:01:05Australia welcomes the new deal that's been reached a year
0:01:05 > 0:01:15after the United States withdrew.
0:01:26 > 0:01:29Of climate change. I will be talking to the boss of the world's biggest
0:01:29 > 0:01:36wind energy producer, who is here in Davos. And we want you to be a part
0:01:36 > 0:01:39of the conversation.
0:01:39 > 0:01:44As quitting smartphones is described as the new "quitting smoking"
0:01:44 > 0:01:46in the FT, we're asking, are you addicted to your device?
0:01:46 > 0:01:49And if you quit your smartphone, what would you miss most?
0:01:49 > 0:01:54Let us know - just use the #BBCBizLive.
0:02:05 > 0:02:09That's an easy question, I would miss your tweets the most!
0:02:09 > 0:02:11Hello and welcome to Business Live.
0:02:11 > 0:02:16As Europe's biggest economy Germany often sets the tone for what's
0:02:16 > 0:02:19happening across the rest of the continent.
0:02:19 > 0:02:25And a big pay increase could be on the cards if Germany's biggest
0:02:25 > 0:02:29trade union, IG Metall, gets its way in the latest round of talks
0:02:29 > 0:02:33with the industrial manufacturers that are the bedrock of the economy.
0:02:33 > 0:02:35IG Metall represents about 2.3 million workers and wants
0:02:35 > 0:02:38an above inflation 6% pay rise.
0:02:38 > 0:02:41The other key demand is the flexibility of switching
0:02:41 > 0:02:43to a 28-hour working week.
0:02:43 > 0:02:48The union is threatening more strikes.
0:02:48 > 0:02:53But one of the big concerns for companies is that unemployment
0:02:53 > 0:02:56is at a record low 3.6%, so they're worried there won't be
0:02:56 > 0:02:59enough staff to fulfil all orders if those workers have the option
0:02:59 > 0:03:02of less hours.
0:03:02 > 0:03:06Unemployment has also been falling across the rest of the Eurozone
0:03:06 > 0:03:09as the global economy continues to pick up, so workers
0:03:09 > 0:03:15are in a strong position to demand higher wages.
0:03:15 > 0:03:22If they get them, it could prove helpful for meeting
0:03:22 > 0:03:32the European Central Bank's target inflation rate of just below 2%.
0:03:32 > 0:03:34They've been struggling to do that, but moving
0:03:34 > 0:03:36forward, it will help them unwind their stimulus programme.
0:03:36 > 0:03:39With me is Karl Brenke, an economist at the German Institute
0:03:39 > 0:03:43for Economic Research - he joins us from Berlin.
0:03:43 > 0:03:47So, if these demands are met, what do you think the impact would be on
0:03:47 > 0:04:01the German economy and the wider European economy?Last year the
0:04:01 > 0:04:06great unions, we have had wage increase of about 2%. And the
0:04:06 > 0:04:14inflation rate in Germany is nearly 2%. And therefore we have no
0:04:14 > 0:04:16increase in real
0:04:16 > 0:04:192%. And therefore we have no increase in real wages. On the other
0:04:19 > 0:04:24hand the companies had a good business last year and therefore I
0:04:24 > 0:04:32think higher wages are necessary, and in my opinion, the increase must
0:04:32 > 0:04:44be 4% or more. And I think it is important that we have a push for
0:04:44 > 0:04:50the business cycle inside Germany, for the domestic demand here.And
0:04:50 > 0:04:57how damaging do you think these strikes would be?Yes, strikes in
0:04:57 > 0:05:07Germany! I think most of our leaders of the great unions know strikes
0:05:07 > 0:05:13only from history! I don't think we will have strikes a! So, what do you
0:05:13 > 0:05:17think as the rest of Europe watches this round going on between unions
0:05:17 > 0:05:22and the manufacturers, as I have mentioned, which form the bedrock of
0:05:22 > 0:05:25the German economy - do you think there will be any discomfort
0:05:25 > 0:05:31elsewhere at how this is unfolding or not? Of course. We have a good
0:05:31 > 0:05:38employment situation, and therefore, the trade unions are in a strong
0:05:38 > 0:05:45position. And I think it would be good also for the other countries of
0:05:45 > 0:05:50the Eurozone if we will have higher wages in the manufacturing, because
0:05:50 > 0:05:58in the last year's, from Germany, in the last year's there was a pressure
0:05:58 > 0:06:06from Germany to other countries because of too slow wage increase.
0:06:06 > 0:06:10So, you think that if they get their wages increases in Germany, we could
0:06:10 > 0:06:14see wage increases across the rest of the continent?I don't
0:06:14 > 0:06:20understand?So, if they get these wage rises in Germany, do you think
0:06:20 > 0:06:25that would be reflected by wage rises elsewhere in Europe?No. I
0:06:25 > 0:06:29think we have a special situation in Germany. We have nearly full
0:06:29 > 0:06:38employment, and if I compare the situation with the South, I think
0:06:38 > 0:06:42there are others which will have not such an increase in other countries,
0:06:42 > 0:06:51like Greece or Spain. I think in Germany, a stronger wage increase is
0:06:51 > 0:06:57necessary, but not in the south of Europe.Karl Brenke from the German
0:06:57 > 0:07:02Institute for Economic Research, thank you very much indeed. If you
0:07:02 > 0:07:07wanted a theme for the day at Davos, as opposed today would be Europe
0:07:07 > 0:07:11day. Angela Merkel and other European leaders will be there,
0:07:11 > 0:07:15Sally?Yes, there's more heads of state this year than there have been
0:07:15 > 0:07:20for many years. We have got a helicopter just above us and I think
0:07:20 > 0:07:26that is delivering a guest, a delegate who is arriving! US
0:07:26 > 0:07:28president Donald Trump will be arriving by helicopter tomorrow
0:07:28 > 0:07:34morning. So, it is all going on here. It is interesting to hear your
0:07:34 > 0:07:37guest Karl Brenke, I wonder if Angela Merkel was listening to him
0:07:37 > 0:07:42as well as a man of course BBC World News is broadcasting here in Davos,
0:07:42 > 0:07:47and she is here and she is preparing to deliver her special address to
0:07:47 > 0:07:51all those who are gathered here for the World Economic Forum. And I
0:07:51 > 0:07:55would imagine many will be wondering what she will have to say when she
0:07:55 > 0:07:59has so much going on in Germany, with the dispute between IG Metall
0:07:59 > 0:08:02and businesses, but also, of course, trying to form a coalition
0:08:02 > 0:08:09government. So, a very busy day here in Davos. We have got her and
0:08:09 > 0:08:12Emmanuel Macron speaking later as well as the Italian Prime Minister.
0:08:12 > 0:08:16Back to you.
0:08:16 > 0:08:19Let's take a look at some of the other stories making the news.
0:08:19 > 0:08:21US Senators have approved President Trump's choice
0:08:21 > 0:08:24of Jerome Powell for the next chair of the US central bank,
0:08:24 > 0:08:25the Federal Reserve.
0:08:25 > 0:08:28The man taking over the world's most powerful job in economics
0:08:28 > 0:08:32is a Republican who is seen to back low interest rates.
0:08:32 > 0:08:39The former lawyer is expected to take over from Janet Powell
0:08:39 > 0:08:42The former lawyer is expected to take over from Janet Yelen
0:08:42 > 0:08:43at the beginning of next month.
0:08:43 > 0:08:46The boss of Ikea Group has told the BBC that the company pays
0:08:46 > 0:08:51its fair share of tax worldwide.
0:08:51 > 0:08:54Speaking in Davos, Jesper Brodin said the Swedish
0:08:54 > 0:08:56furniture giant thinks
0:08:56 > 0:08:59it is "important to contribute to society in many ways
0:08:59 > 0:09:01and paying tax is one of them".
0:09:01 > 0:09:07EU tax officials opened an investigation last
0:09:07 > 0:09:09month into Inter Ikea - a seperate part of Ikea, which
0:09:09 > 0:09:13controls the company's brand rights.
0:09:13 > 0:09:16The entertainment giant Walt Disney says it is giving 125,000 of its US
0:09:16 > 0:09:17staff a one-time bonus of $1,000.
0:09:17 > 0:09:20It's because of the tax reforms that President Trump signed into law
0:09:20 > 0:09:22just before Christmas.
0:09:22 > 0:09:26The company also says it is launching a $50 million
0:09:26 > 0:09:28education fund for staff on hourly conditions, in order
0:09:28 > 0:09:36to help them earn degrees and other qualifications.
0:09:36 > 0:09:45Australia's Prime Minister has become the latest to welcome
0:09:45 > 0:09:49a big new trade deal.
0:09:49 > 0:09:52The Trans-Pacific Partnership covers 11 countries and received a major
0:09:52 > 0:09:58boost at Davos on Tuesday when Canada confirmed it would join
0:09:58 > 0:10:01the deal, a deal which the US pulled out of last year.
0:10:01 > 0:10:09Leisha Santorelli is in Singapore.
0:10:09 > 0:10:11Tell us more about what the Australian Prime Minister had to
0:10:11 > 0:10:19say?Well, Sally, after US President Trump pulled America out of the TPP,
0:10:19 > 0:10:23many analysts said it was dead in the water. But it was clearly just
0:10:23 > 0:10:27on life support because it has been revived. Australia's Prime Minister
0:10:27 > 0:10:31has hailed the new deal, calling it a multibillion-dollar windfall for
0:10:31 > 0:10:37his country. Australia along with Japan was critical to convincing
0:10:37 > 0:10:40Canada and Justin Trudeau to return to the table after he refused to
0:10:40 > 0:10:45finalise the TPP last year. However, the critics and the Australian
0:10:45 > 0:10:50opposition leader say that without the US trade deal has pretty much
0:10:50 > 0:10:55lost its shine and that there is a lack of specifics, especially
0:10:55 > 0:11:03because the US it counts for 40% of the global economy, but without it,
0:11:03 > 0:11:07just 13%. Earlier this month it was reported that the UK was possibly
0:11:07 > 0:11:12looking to join the TPP, so who knows, after Brexit, could replace
0:11:12 > 0:11:22the US?Thanks very much to you both.
0:11:22 > 0:11:26Asian share markets took a time out on Wednesday as investors were left
0:11:26 > 0:11:31breathless at the breakneck pace of recent gains, while a fresh burst
0:11:31 > 0:11:35of speculative selling took the US
0:11:35 > 0:11:39dollar to three-year lows against the euro.
0:11:39 > 0:11:41Japan's Nikkei lost 0.8%, though that was coming down
0:11:41 > 0:11:48from a 26-year high.
0:11:48 > 0:11:56That reflects the strengthening yen, which hits Japanese exporters.
0:11:56 > 0:11:59The main stock markets across Europe were steady at their open -
0:11:59 > 0:12:03none of them moving much in either direction.
0:12:03 > 0:12:09The pound held above $1.40 overnight.
0:12:09 > 0:12:13Investors were betting on tighter monetary policies from central
0:12:13 > 0:12:19banks, bringing them in line with the Federal reserve. It is a big day
0:12:19 > 0:12:25for corporate earnings here in the US, among the many companies
0:12:25 > 0:12:29reporting results being General Electric, which had to lay off
0:12:29 > 0:12:35thousands of people in 2017 and it also changed its leadership as it
0:12:35 > 0:12:38tried to plug falling profits. Investors will be keen to find out
0:12:38 > 0:12:41if rumours about the conglomerate splitting into smaller parts are
0:12:41 > 0:12:46true. Ford Motor Company will also announced results and its forecast
0:12:46 > 0:12:49for 2018. Many will be waiting to hear what tax reforms will mean for
0:12:49 > 0:12:55the car-maker. Whirlpool is expected to report an increase in revenue. It
0:12:55 > 0:13:00stands to benefit greatly from the latest tariffs imposed on washing
0:13:00 > 0:13:04the genes in the US. There will be interested to find out just how much
0:13:04 > 0:13:06the company thinks it could gain.
0:13:06 > 0:13:11Joining us is James Hughes, Chief carket mnalyst at Axi Trader.
0:13:11 > 0:13:14Good to see you. Sup of the dollar doing really interesting things -
0:13:14 > 0:13:21what is your take on what we're seeing?We're seeing some real big
0:13:21 > 0:13:26moves. The overall dollar index, which isn't paired against other
0:13:26 > 0:13:29currencies, saw its biggest fall for three years. So that is a big, big
0:13:29 > 0:13:34move. Dollar weakness has been almost a hallmark of Donald Trump's
0:13:34 > 0:13:38presidency. We all talk about the upside that we have seen in equity
0:13:38 > 0:13:42markets and the Dow Jones hitting new landmarks pretty much every day,
0:13:42 > 0:13:46but the US dollar has been particularly weak. If you couple
0:13:46 > 0:13:50that with the fact that we've had slightly better stories out of the
0:13:50 > 0:13:54UK over Brexit, that is why you can see sterling flying above 1.40
0:13:54 > 0:14:00against the dollar. Stories out of Europe as well, and we have seen the
0:14:00 > 0:14:04bank of Japan, all positive for their currency as well. Add that
0:14:04 > 0:14:09towards the negativity in the dollar and it all gets confounded. It
0:14:09 > 0:14:12almost doesn't seem like a continuation at the moment, it seems
0:14:12 > 0:14:17difficult to find any positivity for the dollar at the moment, because it
0:14:17 > 0:14:21has been so aggressively lower.As you know, Sally is in Davos and I
0:14:21 > 0:14:25think she has got a question for you?!I have always got plenty of
0:14:25 > 0:14:31questions for James! What I wanted to ask you, actually, is to what
0:14:31 > 0:14:34extent you and your colleagues are watching what is going on here in
0:14:34 > 0:14:39Davos, because here we get a sense that there's so much being said, so
0:14:39 > 0:14:43many announcements, a lot about trade, for example, especially with
0:14:43 > 0:14:47Trump arriving tomorrow - are you guys watching it or is it just
0:14:47 > 0:14:53business as usual this week for you? We do keep and eye on it. It is an
0:14:53 > 0:14:56incredibly important weak. But I don't think it necessarily causes
0:14:56 > 0:15:01too much in the way of a big change to the way we work. It is seen as a
0:15:01 > 0:15:05lot of hot air sometimes over there. It is a lot of political posturing,
0:15:05 > 0:15:09and the markets don't really care for anything too political. However,
0:15:09 > 0:15:15when get so many heads of spray state, Angela Merkel, Emmanuel
0:15:15 > 0:15:19Macron and Donald Trump etc, but is where we will get much more focus on
0:15:19 > 0:15:30Davos.Thank you very much, James.
0:15:30 > 0:15:36Still to come: Plenty more here from the World Economic Forum. I will
0:15:36 > 0:15:42talk to the boss of the world's biggest wind power energy supplier.
0:15:42 > 0:15:54That's just coming up later here on business life.
0:15:56 > 0:15:59JD Wetherspoons reports a 6 % increase in second quarter sales -
0:15:59 > 0:16:02and says the unexpected increase - may lead to better than expected
0:16:02 > 0:16:05half year results Joining us now is our business correspondent
0:16:05 > 0:16:12Theo Leggett - tell us more.
0:16:12 > 0:16:20As you say, like-for-like sales were up 6%, and that is sales which are
0:16:20 > 0:16:25directly comparable with previous quarters. Overall sales were only up
0:16:25 > 0:16:284.3%, and that is because whether spoons closed more pubs than it
0:16:28 > 0:16:34opened, and that took a little gloss from the figures. Overall, sales
0:16:34 > 0:16:37have been better-than-expected, meaning the first half results will
0:16:37 > 0:16:40be better-than-expected. That is a good thing this week because the
0:16:40 > 0:16:43company has also had a bit of embarrassment. Last night was
0:16:43 > 0:16:48supposed to be steak night and due to a supplier problem, the stakes
0:16:48 > 0:16:53are to be recall, so customers were offered things like quinoa and the
0:16:53 > 0:16:57Leumi salad. That has generated headlines like this. Other than
0:16:57 > 0:17:01that, the company is doing well but it does not know if it can sustain
0:17:01 > 0:17:06that in the rest of the year.Have they said anything about the
0:17:06 > 0:17:09company's performance going forward? There are factors that may have an
0:17:09 > 0:17:14impact. For example, increases in the minimum wage and the sugar tax
0:17:14 > 0:17:21may push up costs. The World Cup happens in the second half of the
0:17:21 > 0:17:25year, which is unpredictable. When home nations do well, people pour
0:17:25 > 0:17:29into the pubs, one to watch the game and buy a lot of food and drink and
0:17:29 > 0:17:33someone. If the home teams go out early, it's not so good. That makes
0:17:33 > 0:17:40things a little unpredictable. One area that isn't such an issue is
0:17:40 > 0:17:46Brexit. The chief executive of whether spoons is a renowned
0:17:46 > 0:17:49enthusiasm Brexit and he says that even if there is no deal with the
0:17:49 > 0:17:53EU, that doesn't mean prices will go up or anything like that. He's very
0:17:53 > 0:18:03positive about the future.Thank you very much. As always, plenty more on
0:18:03 > 0:18:13our website. Just go to BBC .co .uk/ business. On there right now,
0:18:13 > 0:18:18details about calls for road pricing tailored to drivers based on factors
0:18:18 > 0:18:22like the time of day and congestion. Read more about that report. You can
0:18:22 > 0:18:33also breed it via the BBC News app. -- you can also read it on their BBC
0:18:33 > 0:18:34news app.
0:18:34 > 0:18:35You're watching Business Live.
0:18:35 > 0:18:41Our top story:
0:18:41 > 0:18:44Critical talks get under way later between Germany's biggest trade
0:18:44 > 0:18:51union and employers. The trade union is demanding a 6% pay rise. Could
0:18:51 > 0:18:59this lead to inflation busting pay deals across Europe?Speaking about
0:18:59 > 0:19:09Europe, let's check on the markets. All of them down to a greater or
0:19:09 > 0:19:14lesser extent. At the bottom of the screen, currency markets, the pound
0:19:14 > 0:19:25holding above $1 40.
0:19:26 > 0:19:31Climate change is a big topic for discussion here at the World
0:19:31 > 0:19:37Economic Forum at Davos. Plenty have been talking about responsibility to
0:19:37 > 0:19:45do more around the world to tackle the issue. I am joined by a
0:19:45 > 0:19:48representative of the world's biggest wind energy producer.
0:19:48 > 0:19:51Welcome to the programme. Among those who have been appealing to
0:19:51 > 0:19:55governments around the world to do more about the issue of climate
0:19:55 > 0:19:59change is Christine Lagarde, the managing director of the IMF. Her
0:19:59 > 0:20:03argument is, whilst the sun is shining, fix the roof. This is the
0:20:03 > 0:20:09area where Governments need to share. What is your take?The last
0:20:09 > 0:20:1720 years, we have already invested more than $100 billion in
0:20:17 > 0:20:31renewables. In Britain we closed all of our coal powered plants. My
0:20:31 > 0:20:36position is very clear. 195 countries have already signed an
0:20:36 > 0:20:46agreement to do everything necessary to protect the world and diminish
0:20:46 > 0:20:56climate change emissions. The time is over and we need to take actions.
0:20:56 > 0:21:01When you say 185 countries, you are repairing to the Paris climate
0:21:01 > 0:21:04change agreement which the United States has said this is not happy
0:21:04 > 0:21:09with. It may withdraw or want changes to it. What impact has that
0:21:09 > 0:21:16had to its relevance?When you talk about the United States, you talk
0:21:16 > 0:21:21about the American administration. It is true that the administration
0:21:21 > 0:21:30has decided to withdraw from the Paris agreement, but I think that
0:21:30 > 0:21:35there is an alliance of different cities promoting all the necessary
0:21:35 > 0:21:37for diminishing emissions. The business in the country will
0:21:37 > 0:21:47continue investing heavily, and I think many large corporations are
0:21:47 > 0:21:50already signing contracts with us because they would like to secure
0:21:50 > 0:21:59clean energy for the future.To what extent was the announcement of US
0:21:59 > 0:22:06tariffs on steel products coming out of Asia, what impact does that have
0:22:06 > 0:22:12on the trade of these goods? Where do you source a lot of your steel
0:22:12 > 0:22:16for the wind turbines that you guys provide?Most of them are produced
0:22:16 > 0:22:31in the United States, and we have using established companies. It is a
0:22:31 > 0:22:36protection for the American solar panel industry. We have bought some
0:22:36 > 0:22:42from America in the past.From your perspective, and you deal with
0:22:42 > 0:22:45governments all over the world, what is the biggest obstacle to
0:22:45 > 0:22:54significant progress in this area? Always our investment is long-term.
0:22:54 > 0:23:00We are investing for 40-60 years. We need stable regulation, predictable
0:23:00 > 0:23:05and maintaining the rules. When countries change the rules,
0:23:05 > 0:23:09introducing an intervention, automatically opposes a risk, and
0:23:09 > 0:23:16the flow of investment diminish. We require predictability and a legal
0:23:16 > 0:23:21framework that will be respected. Thank you so much for being on the
0:23:21 > 0:23:30programme. Back to you.
0:23:30 > 0:23:35James is back. We will look at our story in the FT talking about why
0:23:35 > 0:23:44people are quitting these. Apparently we are so addicted to our
0:23:44 > 0:23:49devices. Can we actually live without them?This is the whole
0:23:49 > 0:23:53point. I think it's becoming such a part of life now that people are
0:23:53 > 0:23:58becoming more addicted to them rather than just using them on the
0:23:58 > 0:24:02off chance. One of the interesting things it says here is that it
0:24:02 > 0:24:06compares it to junk food. You know it's not particularly good for you
0:24:06 > 0:24:10but you do enjoy it when you are there. You know you shouldn't do it
0:24:10 > 0:24:16all of the time. That is the feeling we have with smartphones. There is
0:24:16 > 0:24:20so much on a smartphone now that we have to live with. You have to check
0:24:20 > 0:24:25e-mails for work, there is all sorts of different things, but of course,
0:24:25 > 0:24:29the argument in the article is that we don't actually need any of these
0:24:29 > 0:24:32things. We got on pretty well beforehand and we will get on
0:24:32 > 0:24:37afterwards if we don't have to use these. It is the classification of
0:24:37 > 0:24:40these companies, very much like the cigarette companies used to be in
0:24:40 > 0:24:46the 90s, that the tobacco industry. These companies are being
0:24:46 > 0:24:49categorised as big tech, and investors are saying, we want you to
0:24:49 > 0:24:53do something about the addictive nature or how many people are
0:24:53 > 0:24:56becoming addicted to these devices, to make sure it doesn't have a
0:24:56 > 0:25:01knock-on effect on mental health, the same way happened with big
0:25:01 > 0:25:05tobacco in the 90s.James, thank you very much indeed. Thank you for all
0:25:05 > 0:25:10the messages you have sent. We have been having a look through those. We
0:25:10 > 0:25:17will go through them a little later. I want to bring some breaking news,
0:25:17 > 0:25:23and we join Sally in Davos.Thank you. We're hearing through Reuters
0:25:23 > 0:25:29news agency that they are quoting Wilbur Ross, who is here, the US
0:25:29 > 0:25:36commerce secretary, saying, trade war is a thought every single day.
0:25:36 > 0:25:41That is a quote coming from Reuters. He is here. The US president arrives
0:25:41 > 0:25:45here tomorrow. That is all from me for now.
0:25:45 > 0:25:48That's it from Business Live today.
0:25:48 > 0:25:51There will be more business news throughout the day on the BBC Live
0:25:51 > 0:25:52webpage and on World Business Report.
0:25:52 > 0:25:56We'll see you again tomorrow.