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This is Business Live from BBC
News with Ben Thompson
and Samantha Simmonds.
The EU publishes its first
formal look at how things
will work once the UK leaves.
Live from London, that's our
top story on Wednesday
the 28th of February.
Business continues to fret
about uncertainty as the document
says Northern Ireland might have
to follow EU rules to avoid
imposing a hard border.
We'll look at the implications.
Also in the programme.
The biggest recall in car making
history gets even bigger.
Australia orders a compulsory
return of more than two
million Takata airbags.
And an optimistic outlook
from the new boss of
America's Central Bank with more
rate rises on the cards.
The dollar has jumped,
but markets are down.
Hello and welcome to Business Live.
We will get the inside track on how
We will get the inside track on how
you stop Winter flu. The boss of one
of the biggest vaccine companies in
Europe will talk to us about how
healthy. With Toys R Us on the brink
of collapse, we want to know, do you
buy your toys online or in a shop?
Let us know.
Welcome to the programme.
With just over a year to go
until Brexit as we speak,
the EU is publishing a draft
of the Brexit treaty that
will specify the terms
of the UK's departure.
But for business and investors
there's still a huge
amount of uncertainty.
One of the key issues it covers
is Northern Ireland's land border
with the Republic of Ireland.
In 2015 $3.4 billion worth
of goods were traded
across it in both directions.
On Tuesday, the UK's International
Trade Secretary Liam Fox reiterated
that "The avoidance of a hard border
in Northern Ireland
is of crucial importance".
That's something the Republic
of Ireland agrees with.
But businesses on both sides want to
know what the future rules will be.
And in the document the EU
is expected to confirm its fall back
position, that EU rules continue
to apply on both sides of the Irish
border after Brexit.
Our correspondent Adam
Fleming is in Brussels.
Today is a significant day for
anyone who watches these
negotiations, today is a day which
could change the future of them.
Yes, we will get this 120 page
document with 168 paragraphs, a few
protocols and annexes thrown in for
good measure so not easy reading.
Everyone is looking at the language
about the Irish border and
preventing physical infrastructure.
In September three options were
agreed, option that a is an amazing
trade agreement which obviates the
border, option B means that you use
technology so you don't have to have
a hard border, and option C, the
most controversial and the UK
Government's least favourite, is
that Northern Ireland sticks to the
EU's rules on trade, customs and all
sorts of things. Option C is the
option that will be detailed in
legal language over a whole lot of
pages today. However the document
will not do options left a and B but
there has not been an opportunity to
negotiate that so it will all be
down to the British government and
their reaction. This is the first
strath of history, it hasn't even
been approved by the 27 member
states of the EU or negotiated with
the UK yet so long way to go until
its final draft.
Good luck, it will
be a busy for you.
With me is Sir Simon Fraser -
he is a Managing Partner
at the business cosultancy,
He used to be Permanent Secretary
at both the UK Foreign Office &
Department for Business
as well as Chief of Staff
to the EU's Trade Commissioner.
So a man well placed to give us an
insight into what's going on! I'd
like to get your reaction to the
British Foreign Secretary's Boris
Johnson's comment a few days ago
that this border issue is being
caused to frustrate Brexit, what's
I don't think that
was the case, we have boys known
this was a key issue and Liam Fox,
as we have heard, hasn't said
avoiding a hard border is essential.
One of the things is that the
government has got to come up with a
proposal outlining what it wants.
have had significant days in the
past year of the negotiations but it
becomes significant today, the
lawyers have to get in a room and
the first things out and there does
not seem to be a significant
position from the British
Yes, it's important, we
are moving from political
negotiations to a legal negotiation.
Once the lawyers in the room, you
have to have precision and things
nailed down in the details. We know
that there was a lot of ambiguity
around Northern Ireland which has to
be clarified now. That's why today
is such an interesting day and wait
there is -- why there is a debate
going on around the sticks.
a consultancy service, what basis is
saying about this uncertainty?
Businesses are saying that it is
difficult in Ireland and Northern
Ireland, but it's wider than that,
because Irish businesses often
operate via the UK into the EU.
Business needs certainty and they
particularly want a transition
agreement arranged to cover the
circumstances around the UK leaving
and after March 20 19. It will be
part of this withdrawal agreement
which is now being negotiated so it
has to come together in a way that
gives business clarity.
What do they
say to you about what an ideal
scenario would be?
What they want
Apart from the certainty.
an ideal scenario would be a
continuation of the current rules.
Business wants clarity and the
minimum number of changes to make,
and a longer-term security, so it
can make not only operational
choices but investment decisions the
We will see if we get any of
the clarity in the coming hours and
days. We will keep you up-to-date.
Let's take a look at some of
the other stories making the news.
US customs will start
charging duties on imports
of aluminium foil from China.
The tariffs of as much as 106% have
been imposed after US
manufacturers complained that
Chinese made goods were being dumped
in the US at below cost price.
They also allege that Chinese
producers are receiving unfair
Amazon has agreed to buy the video
doorbell maker Ring in a deal
reported to be worth more
than a billion dollars.
It's set to be one of Amazon's
most expensive takeovers
after its almost $14 billion
dollar deal last year for
Whole Foods Market.
It could help Amazon improve how
it delivers parcels.
In the UK, Toys R Us
and the electronics chain Maplin
are both on the brink of collapse
with more than 5,000
jobs at risk.
The struggling retailers
are understood to have put
administrators on stand-by
after failing to
secure a rescue deal.
The US parent of Toys R Us is also
reported to be trying
to sell its European and Asian arms
as it struggles with $5bn of debt.
The biggest recall in
carmaking history has just
got bigger yet again.
That's because the Australian
government has ordered a compulsory
recall of 2.3 million
More than 100 million have already
been recalled around the world
because of faults which mean
they have exploded and killed
at least 23 people and
injured about 200 others.
It's forced the Japanese
firm to bankruptcy.
Hywel Griffith has
the details from Sydney.
There was already a voluntary recall
last year, the government simply not
satisfied with the response.
And there are concerns
about what happened to some of those
vehicles that have already been
taken off the road
and put into garages.
It's understood that
while some were taken
in to have the old airbags taken
out, they were simply given
new similar airbags by the same
company with the same fault.
The fault increases over
time, so it was a make
do and mend approach.
The government isn't happy with that
and therefore those cars already
being taking in and new cars
and models will also have to go
in as part of this compulsory recall
before the end of 2020.
And now because this
recall is compulsory,
it's up to the manufacturers to bear
the cost of bringing the vehicles
back in and replacing the airbag
with a completely different one.
Of course, Takata is having huge
global of problems with this,
100 million vehicles
worldwide affected overall.
The company has already filed
for bankruptcy but this now
will mean the cost in part goes
on to the big brand car
manufacturers, many of them Asian
companies but also the likes
of Volkswagen, Ford
and Holden here in Australia.
So we heard from new Fed Chair
Jerome Powell yesterday
and he was pretty optimistic
about the state of the US economy.
That being seen as a sign
that the Fed could raise rates more
than three times this year
which pushed up treasury yields
and the dollar rallied
against all major currencies.
It appears he's firmly
of the thinking that rates need
to gradually increase to prevent
the US economy from overheating.
There is a concern that if they
raise rates to quickly, it could not
enough, but more than that and could
We will assess all of the
indications of that and that new Fed
chair and what that could mean for
the economy. But first the details
from Wall Street.
New Fed chair Jerome Powell's
comments to Congress on
Tuesday seemed to
drive stocks lower.
Investors now have to wait a day
for his next appearance in
Congress which will be on Thursday.
In the meantime, they'll have plenty
of other news to contemplate.
The latest read
on GDP, for starters.
The second estimate for how well
the US economy grew in the last
quarter of 2017 is expected to show
a slightly reduced annualised
growth rate of 2.5%.
That's somewhere below the 3% that
President Trump says he'll deliver.
And there's a steady
stream of corporate news.
Software giant Salesforce is likely
to tout rising quarterly revenues
thanks to strong demand
for its cloud competing services.
The storage provider
Box Two is also forecast
to produce stronger earnings.
Joining us is Sue Noffke, UK
Equities Fund Manager at Schroders.
Good morning, thank you for braving
the snowy conditions out there. Fera
whether in the United States, we
have been talking about this speech
from Jerome Powell, first as chair
of the Fed, what did you make of it?
Markets have interpreted it as
hawkish. He is more plain speaking
than his predecessor, Janet Kelland,
so he had laid things out. The
economy is doing pretty well, pretty
strongly. Plus the fact that he was
highlighting that for the future
couple of years, he can see the
economic growth remaining quite
strong because of the tax cuts that
have been announced. That's going to
sustain growth. Inflation has been
muted and has not reached the 2% fat
target, so without interest rate
rises, we're going to overshoot.
We're in a diverse situation where
it's good news that leads to falls
in an equity moment.
As a change to
bad news leading to rises in the
That seems weird to
Yes, it's all about
what is priced in and where the
tipping points are. We have this
Goldilocks scenario, neither not hot
enough or not too hot economic news,
just right. Very loose monetary
policy, but we're seeing that
change, we are seeing tapering in
quantitative easing which is slowing
the amount of government bond buying
this year and contracting mixture.
At the same time, interest rates
rising and the pace of those ahead
of what people thought.
are expecting three rate rises?
to four. But that's only one
percentage point on interest rates
so it's not scaring the horses, but
bond yields are approaching 3% for
10-year Treasuries. That repricing
of money is beginning to cause
people to think about what products
they will undertake.
Thank you very
It's that psychological shift that
we're so used to with money being so
cheap for so long with interest
rates being so and over so long, a
change could be seen as a big move.
Still to come...
Keeping on top of the flu,
as cold weather grips Europe one
of the continents largest vaccine
company's tell us how it's
technology is keeping us healthy.
You're with Business
Live from BBC News.
In the UK, we have had results from
the commercial broadcaster ITV.
They reported a 5% fall
in full-year profits,
after a tough year for advertising
However it saw growth
in its studios business,
which makes TV shows for the network
and other broadcasters.
New CEO Carolyn McCall
is aiming for a strategic
refresh of the business.
Tom Harrington is from
Enders Analysis is here to tell us
what that might mean.
She called it a strategic refresh
but that is tough for advertising
right now in the market?
announced net advertising revenue
was down 5%, in line with guidance,
and what has been happening in the
market, the market trend,
unsurprising in that regard. The
last five years has seen ITV moving
away height quickly from a model
that is based entirely upon
advertising revenue and towards one
which gets increasingly upwards of
50% now in their production
capabilities. They are protecting
themselves from the ups and downs of
the advertising market.
McCall came in from Ryanair, a lot
of hope split on her shoulders. Can
she turn things around?
I think she
has to worry about the ingress of
tech giants into the TV advertising
space. She has been championing
television as a safe and mass
reaching medium. You can see brands
adverts online easily, not next to
jihadi videos or anything like that.
The ITV Hub has been doing a lot
better. They also have the breadbox,
nobody knows what is happening with
And all of the stuff that they
will show, the World Cup games, that
is a big one. And the perennial
favourite Love Ireland!
done well in 2016 and 2017 -- Love
Island. Up 15% in terms of share,
they do have the World Cup,
something to look forward to. And
this is the year that they cash in
on Love Island. They did
phenomenally online last year. So
they can charge outrageous amounts
of sponsorship and stuff like that.
Carolyn McCall came in from easyJet,
You're watching Business Live.
The top story today, the first draft
of the EU's legally binding Brexit
treaty is being published as we
speak. There is a lot of it, about
150 pages. It will say that unless
there is another deal, Northern
Ireland will have two follow single
market rules to avoid having a hard
border with the Irish Republic. It
is a big sticking point as far as
Brexit negotiations are concerned.
And a quick
Brexit negotiations are concerned.
And a quick look at the European
markets, all opening slightly down
following negative trading on the
Asian markets overnight.
And also on the
Asian markets overnight.
And also on the US markets.
Have you fallen foul
of the dreaded flu this winter?
Doctors and companies,
suffering staff sickness,
will agree it's been the worst flu
season in years.
So what about prevention?
Our next guest runs one
of the world's largest flu vaccine
companies; Seqirus specialises
in the influenza vaccine
for the elderly, and is licensed
in Europe and North America.
The US Centers for Disease Control
and Prevention said this season's
vaccine is just 36% effective,
only 25% against the nastiest,
dominant strain H3N2.
The firm says its novel method,
producing vaccines in cells
at commercial scale,
is an industry first
and overcomes the problem
of vaccines being outsmarted
by a mutating virus.
We will ask him to explain this in a
But tackling constantly
mutating flu strains needs
So it's focusing on its Liverpool
plant - one of the biggest
biotech sites in Europe -
with a £60 million investment.
Gordon Naylor, President
of Seqirus joins us.
A warm welcome to you. Let's talk
about how you, first of all, manage
the mutation of the flu virus and
try and precipitate that, when you
are creating a flu vaccine itself.
The influence virus is a wily foe
and it constantly changes and
constantly mutates. There are
multiple strains. There has been a
whole global collaboration which has
been working since the 1940s to find
out how to respond. That rapid
mutation is the reason why we have
to have a new vaccine every year. So
Fourie manufacturer like ourselves,
who are global, we go through two
product and development cycles, one
for the Southern Hemisphere and one
for the Northern hemisphere every
We were just talking and I'm
staggered at how much planning you
have to do. Once you have decided,
or the organisation, has decided
which strains of the virus you will
tackle, you have a lot of work to do
before it hits the market.
quite a challenge. As you know,
there was snow on the ground here in
London, we are in the middle of a
serious winter. We have been
manufacturing for several weeks now.
This will take us into the next
Northern Hemisphere winter.
months from now?
Yes, the World
Health Organisation directs free
agencies on which virus strains are
to be manufactured, and they made
the decision on Friday.
has been really bad around the world
for those suffering from flu and the
number of deaths. Why is that? Is it
because the vaccines are wrong, or
because it is a wily foe, as you
Influencer is a pretty --
influenza is a pretty serious
disease. Around 650,000 people per
year die globally from influenza out
of a backdrop of 5 million cases,
many. This year has been
particularly serious, we have had
elevated levels of serious illness
and mortality around the world.
These virus strains are particularly
difficult, especially for the more
vulnerable elderly. The challenges
because of this long lock in effect,
and we had to make the decision
early, this virus continues to
mutate and it can make it difficult
to catch up. The other challenge is
we know that for most manufacturing,
which is done in eggs, that
sometimes there is an effect where
the virus changes a little bit as
part of that manufacturing process
which can make it more challenging.
That is what we are seeing, we
think, in much of the markets this
As Sam says, it has been one
of the worst flu seasons in decades.
I hesitate to use the phrase "Good
news" for you but as a business
selling a vaccine to tackle flu, how
does work financially when there is
such a bad flu season, do your sales
We would to think so but in
many of our markets the reality is
we made those manufacturing
decisions many months before we knew
the severity of the season.
means you cannot particularly plan,
if there is a big upswing, you
cannot get the vaccine out quickly
enough to cope?
It is difficult for
a manufacturer to respond rapidly.
You tend to make a little more than
what you expect will be needed but
that's about the only measure you
It is good to see you this
morning. Good luck for next year!
A pair of smart shoes has been
created to help industrial workers
keep in touch via toe typed coded
Rory Cellan Jones met the inventor
and Mobile World Congress in
Barcelona. MORSE CODE.
In the year if the Internet,
it seems everything is connected,
including safety shoes.
This one has got a SIM card in it.
This is inside, what is it doing?
So, this product has
a smart SIM card
embedded in it and a
wireless module to send
a message from a worker,
safety message, from his team,
to send an alert or to get the other
way around, a message
from his manager.
Telling him to stay safe,
in case of a hurricane or a big
So just moving up the toe or pushing
a button on his shoe,
it will send a message directly
to his team or the other way around.
So the manager can
send a message and
the shoe will vibrate, telling them
that there is a message.
It will do a lot of noise.
80 decibels of sound,
to warn him of an alert.
I hope they make them in red...
great story, the latest technology
from Rory Cellan-Jones there. An
update on our top story. We've just
heard from the Irish Prime Minister
saying it is up to Britain to bring
proposals to the table as far as the
border is concerned. There is a lot
of concern as to whether there will
be a hard border between Northern
Ireland and the republic. He said it
is up to Britain to bring such
proposals to the table. Full
coverage of that at the top of the
hour. Sue has rejoined us to talk
about some of the stories in the
We have been talking about
electric cars, and the market for
them. Sometimes you can't plug them
The Guardian newspaper says that
isn't the case at all.
They are quite expensive as well. I
have an electric car. The range is
not as good as I would like to be.
There is a lot of development going
on, we are going to see some more
models coming onto the market give
consumers more choice at different
price points as well.
And a quick
word on our other story as well, the
future of Toys "R" Us in the UK. The
American firm said it is trying to
sell a number of units, could it
disappear from the UK?
It could, it
hasn't kept up with The Times or
student demands for service and
flexibility. I think the future is
A quick too sweet,
someone says they go online for
convenience, it isn't always the
cheapest option -- a quick tweet.