Browse content similar to 18/10/2011. Check below for episodes and series from the same categories and more!
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morning. Stay with us. We switch now for the latest | :00:03. | :00:13. | |
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Welcome. This is World Business Report. The headlines: China, the | :00:21. | :00:26. | |
global engine of growth, expands at this -- its slowest rate in two | :00:26. | :00:30. | |
years. As the UK, consumers feel the | :00:30. | :00:34. | |
squeeze as prices rise at their fastest rate for three years while | :00:34. | :00:44. | |
:00:44. | :00:50. | ||
China's growth rate is the envy of most of the industrialised world. | :00:50. | :01:00. | |
:01:00. | :01:02. | ||
Wealth expanded at an annual rate but things are changing. The aim | :01:02. | :01:08. | |
was to reduce growth gradually. But the rest of the world his county on | :01:08. | :01:12. | |
China to get the balance right because they hope Chinese buyers | :01:12. | :01:16. | |
will replace cash-strapped consumers in Europe and the US. In | :01:16. | :01:21. | |
a moment we hope to go live to Beijing to speak to an expert about | :01:21. | :01:25. | |
the latest growth numbers out of China and what they need for the | :01:25. | :01:30. | |
rest of the global economy. -- what they mean. New data is set to show | :01:30. | :01:35. | |
prices rising at their fastest rate for three years. Higher fuel and | :01:35. | :01:40. | |
energy costs are to blame. Terrible timing as incomers are frozen and | :01:40. | :01:43. | |
the number of people out of work is on the up. | :01:43. | :01:48. | |
As autumn takes hold in the UK, many homes will be turning up their | :01:48. | :01:51. | |
central heating. But with energy prices are rising from three of the | :01:51. | :01:55. | |
main suppliers, it could be a costly card for households and | :01:55. | :01:59. | |
businesses. The rise in the cost of energy has been singled out as the | :01:59. | :02:04. | |
biggest influence in UK inflation this mark. Putting the brakes to | :02:04. | :02:10. | |
the highest level in three years. - - pushing the rate. Prolonged debt | :02:10. | :02:20. | |
crisis in the eurozone means the UK is at a virtual standstill. | :02:20. | :02:24. | |
Inflation is set to flow sharply in the next 12 months. The current | :02:24. | :02:28. | |
rate of inflation is unlikely to concern the Bank of England | :02:28. | :02:31. | |
Coberley, even though we had been - - it has been above their target | :02:31. | :02:36. | |
every month since December 2009. The bank recently increased its | :02:36. | :02:46. | |
quantity of -- quantitative easing programme. There is a general | :02:46. | :02:49. | |
expectation that the eurozone could fall back into recession in the | :02:49. | :02:54. | |
final quarter of this here and next year. The UK's major trading | :02:54. | :02:58. | |
partner is the eurozone so that will impact us as well. UK growth | :02:58. | :03:03. | |
will stay week from now export markets. And we have problems at | :03:03. | :03:09. | |
home that will weaken domestic economies. The major supermarkets | :03:09. | :03:13. | |
have begun a price war in advance of the festive season. But those | :03:14. | :03:18. | |
price cuts are not expected to show until late in the year. So with | :03:18. | :03:22. | |
consumers feeling the pressure of higher energy costs, lower food | :03:22. | :03:26. | |
costs will be a relief. Many will be keen to see if inflation does | :03:27. | :03:33. | |
peak as promised by the bank at this level. | :03:33. | :03:37. | |
The Bank of America and Goldman Sachs are the latest major US banks | :03:37. | :03:43. | |
to report earnings later today. On Monday, Citigroup said they saw a | :03:43. | :03:47. | |
drop in revenue compared to the same period last year. Banks have | :03:47. | :03:52. | |
been hurt by the market turmoil and the fall in consumer and business | :03:52. | :04:00. | |
confidence. Protesters are demonstrating | :04:00. | :04:05. | |
against corporate greed. But there may be less for them to occupy as | :04:05. | :04:10. | |
banks continue to struggle and try to count cost. Take the Bank of | :04:10. | :04:15. | |
America. The country's largest lender plans to lay off about | :04:15. | :04:20. | |
30,000 employees of the next few years. It has been busy baffling | :04:20. | :04:24. | |
lawsuits relating to mortgagors and its investment banking division | :04:24. | :04:28. | |
which lifted profits for the first half of this year is unlikely to | :04:28. | :04:36. | |
repeat that again. One man explains why. We will hear a lot of bad news, | :04:36. | :04:40. | |
for to the Lea. Banks are a reflection of the US economy and | :04:40. | :04:50. | |
:04:50. | :04:53. | ||
when that is slow, Bledisloe. When it comes to revenue, things will be | :04:53. | :04:57. | |
down. We sit inside this bilby also appear to be using their magic | :04:57. | :05:06. | |
touch. -- inside this building. In July, golden and sacks said they | :05:06. | :05:16. | |
:05:16. | :05:18. | ||
would lay-off 1,000 around 1,000 employees. They are neck and neck. | :05:18. | :05:28. | |
:05:28. | :05:31. | ||
They are good competitors. Morgan Chase's were soft. That will be the | :05:31. | :05:40. | |
case with Goldman Sachs as well. Their results are based on | :05:40. | :05:47. | |
investment banking. This crowd is unlikely to shed too many tears. | :05:47. | :05:50. | |
But for the finance industry faced with new banking rules and tough | :05:50. | :05:54. | |
economic conditions the answer to the current slowdown is lower | :05:54. | :06:02. | |
bonuses and fewer jobs. Returning to the top storey, the | :06:02. | :06:08. | |
news that growth in China has slowed in the third quarter. That | :06:08. | :06:13. | |
is the 7th quarter in a row or two- year period of growth slowing down. | :06:13. | :06:19. | |
We speak to an associate professor at a school of economics in Beijing. | :06:19. | :06:25. | |
Thank you for joining us on the line. What is your interpretation | :06:25. | :06:30. | |
of growth slowing in China? Is this something to be concerned about or | :06:30. | :06:33. | |
have Chinese authorities got it right, they are slowing it at a | :06:33. | :06:38. | |
sustainable level? The concern is not so much slowing-down. The | :06:38. | :06:43. | |
government is trying to introduce a slowdown. The concern is if China | :06:43. | :06:48. | |
comes off the high level of growth, that cracks emerge in the financial | :06:48. | :06:54. | |
system in China. There are people who have debts on high levels of | :06:54. | :06:58. | |
growth. Especially real estate developers and others. If they are | :06:59. | :07:03. | |
not able to achieve these incredibly high levels of growth, | :07:03. | :07:09. | |
they will not be able to pay their loans. That means local government | :07:09. | :07:13. | |
cannot continue to sell property to pay off their loans. Then you get a | :07:13. | :07:19. | |
domino effect. So there are already cracks emerging in the financial | :07:19. | :07:23. | |
system in China. Even though growth has not slowed that much, it is | :07:23. | :07:31. | |
still quite high. They want growth to slow at a sustainable level, as | :07:31. | :07:34. | |
I said. But you are implying that unless it has better at double- | :07:34. | :07:40. | |
digit growth numbers, we are heading for real problems? Yes. It | :07:40. | :07:46. | |
is very difficult for them... They want to stage a correction without | :07:46. | :07:51. | |
having a correction. That is what they mean when they say soft | :07:51. | :07:57. | |
landing. In fact, China needs to undergo a quality of adjustment in | :07:57. | :08:07. | |
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what is driving economic growth. What they need to do is develop a | :08:08. | :08:14. | |
consumer economy in China. But it has not been happening. Consumer | :08:14. | :08:18. | |
demand has been increasing but not enough to tilt the balance. So | :08:18. | :08:23. |