:00:05. > :00:15.senior surviving leaders. Now it is time for the latest
:00:15. > :00:16.
:00:16. > :00:22.business also -- business. Hello and welcome to World Business
:00:22. > :00:26.Report. The headlines: Fear and frustration returned to the global
:00:26. > :00:34.financial markets as US politicians failed to agree a $1.2 trillion
:00:34. > :00:39.worth of spending cuts. Asian markets gave a muted reaction
:00:39. > :00:49.to the failure of the US debt talks. Spain prepares far higher borrowing
:00:49. > :00:56.
:00:56. > :01:01.costs of. Good to have you with this. Another
:01:01. > :01:05.day, another debt crisis. Attention is focused across the Atlantic. The
:01:05. > :01:09.super committee charged with finding a compromise to deal on how
:01:09. > :01:13.to act $1.2 trillion in US government spending admitted
:01:13. > :01:17.failure late on Monday. But the matter of reducing America's 15
:01:17. > :01:27.trillion dollars government debt mountain has not gone away. A
:01:27. > :01:33.
:01:33. > :01:38.series of automatic emergency cuts There were last ditch attempts.
:01:38. > :01:44.size of feeling the pain. But in the end the sides could not agree
:01:44. > :01:50.on which social programmes to Co itself. This means automatic cuts
:01:50. > :01:54.of around $1.2 trillion could come into effect in 2013. President
:01:54. > :02:02.Obama says he is determined to implement those cuts. I will veto
:02:02. > :02:08.any effort to get rid of those automatic spending cuts to domestic
:02:08. > :02:14.spending. But the inaction in Washington has already begun to
:02:14. > :02:20.spooked US markets and could push share prices lower. Investors are
:02:20. > :02:26.going to lookout every move and ask themselves how is that company
:02:26. > :02:31.going to be herds if there is a crisis and we have Greek like
:02:31. > :02:37.cutbacks in spending -- to be heard. While the credit rating agencies
:02:37. > :02:43.seems to have reacted calmly, business leaders are concerned
:02:43. > :02:50.about bickering. It is very unfortunate. I still believe US
:02:50. > :02:55.businesses will pose enough pressure on the government, even in
:02:55. > :03:00.an election here. But Europe stands as a frightening example of too
:03:00. > :03:05.much spending and too little political will. It is easy to see
:03:06. > :03:09.how America got into debt, huge spending on defence and the
:03:09. > :03:18.spiralling cost of its social programmes. The politicians are not
:03:18. > :03:25.finding it easy to pick out of bed. A dangerous deadlock for the
:03:25. > :03:31.American government. The news that the Seebohm Committee
:03:31. > :03:41.came at the end of a tricky day for markets -- super committee. In the
:03:41. > :03:42.
:03:42. > :03:49.US that added to a tricky session. The Dow Jones is damp by 2.2%. --
:03:49. > :03:53.down by. Now let's see what is happening in Asia.
:03:53. > :04:01.Fairly muted reaction here to the failure of the debt talk. We saw
:04:01. > :04:11.markets opening with bigger declines than it now. They have now
:04:11. > :04:17.recouped some of those steeper losses we saw earlier. They have
:04:17. > :04:27.continued worrying. At one stage we saw the Nikkei hitting an eight-
:04:27. > :04:37.month low. We are seeing markets fairly flat. The Nikkei is down
:04:37. > :04:37.
:04:37. > :04:42.ever so slightly, 0.1%. Australia is down 1%. Those worries about the
:04:42. > :04:52.debt problems and inability of policy makers to come to a
:04:52. > :04:58.consensus is worrying a lot of in - - Asian investors. Investors are
:04:58. > :05:04.seeking out safe havens. The US dollar actually maintained its
:05:04. > :05:09.level in Asia. The Indian rupee fell to a record level on fears of
:05:09. > :05:15.US debt concerns and the concerns in the US. Investors are seeking
:05:15. > :05:21.out safe havens. Thank you. The strong US dollar
:05:21. > :05:27.means many exporters as top Asia are having a better session today.
:05:27. > :05:33.-- out. Spain is to hold its first auction of government debts since
:05:33. > :05:36.the conservative Popular Party came into power. There are expected to
:05:37. > :05:40.be tough austerity measures introduced to bring down the
:05:40. > :05:44.national debt but there has not reduced the interest rates on
:05:44. > :05:48.National government bonds. The party one of the biggest
:05:48. > :05:52.election victory for 30 years but there has been no feel-good factor
:05:52. > :05:58.on the markets. Government bond yields have continued to rise. On
:05:58. > :06:02.Tuesday, the government will go to markers to auction between 2-3
:06:03. > :06:07.billion it euros worth of Treasury bills. The yields have been rising
:06:07. > :06:13.on this short-term debt. They will get sufficient demand for these
:06:13. > :06:19.issues. But with elevated yields, which will leave a large question
:06:19. > :06:24.mark over how long Spain will be able to finance itself. Last year,
:06:24. > :06:29.the government debts stood at over 9% of national income. The Prime
:06:29. > :06:37.Minister has vowed to bring it down to 4.4% by the end of next year.
:06:37. > :06:41.With his -- discontent five, he will not be in a hurry to start the
:06:41. > :06:45.cuts. TRANSLATION: The government has a large majority but there is a
:06:45. > :06:49.lot to do. I doubt the Government will want to create negative
:06:49. > :06:55.sentiments straight away. Spaniards are hoping the European Central
:06:55. > :06:59.Bank will step in and buy their bonds. Without greater intervention
:06:59. > :07:04.from the ECB it is hard to see what Spain's governments can do on its
:07:04. > :07:09.own to solve its debt crisis. The unemployment based is over 20% and
:07:09. > :07:14.the economy is on the verge of recession. Spending cuts my
:07:14. > :07:18.pleasure over the brink. That may make Spain's debts even harder to
:07:18. > :07:28.pay off. The world's biggest computer maker
:07:28. > :07:29.
:07:29. > :07:39.has reported a 91% fall in profits. That is Hewlett Packard, 209 who
:07:39. > :07:43.
:07:43. > :07:48.made $239 million. Its new devices racked up huge charges. The former
:07:48. > :07:53.boss of the insurance giants i Ng is suing a government for $29
:07:53. > :07:59.million. He claims the state's takeover in the group was
:07:59. > :08:08.unconstitutional and done without shareholder approval. The
:08:08. > :08:13.government had an 80% stake in the company.
:08:13. > :08:19.In the UK, the rich are getting richer and that is the finding of a
:08:19. > :08:23.year-long inquiry. The reports suggest executive pay has soared in
:08:23. > :08:29.the last 30 years, undermining productivity and damaging trust in
:08:29. > :08:34.British business. Many workers are facing a squeeze
:08:34. > :08:38.with cuts in wages. According to the high paid commission, when it
:08:38. > :08:45.comes to pay there is a growing division between those at the top
:08:45. > :08:53.and everyone else. Last year, the average salary was just under
:08:53. > :09:03.�26,000 while the average total earnings of the 3,100 chief
:09:03. > :09:05.
:09:05. > :09:10.executive was �3.74 million. -- 3,100. The Commission says this pay
:09:10. > :09:15.gap is no longer acceptable. Within five years we will be back at
:09:15. > :09:19.Victorian levels of inequality. If that is what we want as a society
:09:19. > :09:25.then fair enough. I suggest that most people do not want to end up
:09:25. > :09:29.there. At the CBI's annual conference they had an explanation
:09:29. > :09:34.as to why pay packets need to be generous. You have to be
:09:34. > :09:38.competitive with the best of the world. While we are constraining
:09:38. > :09:42.pay in some areas if you want people to come to work in the UK
:09:42. > :09:48.you have to be prepared to pay the amount of money those executors can
:09:48. > :09:52.get elsewhere in the world. report says radical reform in
:09:52. > :09:58.Britain's top boardrooms is needed, including simplifying how executors
:09:58. > :10:02.are paid and making the process more transparent as well as putting
:10:02. > :10:05.employees on a remuneration committees. The business secretary