Browse content similar to 06/03/2012. Check below for episodes and series from the same categories and more!
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world's sixth-biggest economy, and a trip to the Geneva Motor Show. | :00:04. | :00:14. | |
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Sally is in the driving seat with Hello, and a warm welcome. You're | :00:14. | :00:16. | |
with World Business Report. I'm Sally Bundock. | :00:16. | :00:21. | |
Here are the headlines: How Brazil's economy is set to | :00:21. | :00:24. | |
overtake the UK as the world's sixth-biggest. | :00:24. | :00:30. | |
And from the Geneva Motor Show, we'll ask the boss of Jaguar Land | :00:30. | :00:34. | |
Rover about the future of car manufacturing in Europe. | :00:34. | :00:37. | |
I'm Rico Hizon in Singapore. Australia's central bank keeps | :00:37. | :00:47. | |
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rates on hold, but leaves the door Good to have you with us. Growth | :00:53. | :00:57. | |
figures out today could show Brazil's economy overtaking the UK | :00:57. | :01:02. | |
to become the world's sixth-largest. The South American giant is | :01:02. | :01:05. | |
currently enjoying a boom because of high food and oil prices. Many | :01:05. | :01:08. | |
economists predict the growth will last for some years to come. | :01:08. | :01:12. | |
However, there are warnings for investors who see Brazil as the | :01:12. | :01:18. | |
next place to pile into. The old joke about Brazil is it's | :01:18. | :01:23. | |
the country of the future, and always will be. In the past, its | :01:23. | :01:26. | |
vast mineral wealth and agricultural wealth have tended to | :01:26. | :01:30. | |
be cancelled out by high inflation and government debt, high levels of | :01:30. | :01:34. | |
poverty, and lawlessness. But Brazil's economy has been booming | :01:34. | :01:40. | |
over the past decade, and after a mild recession in 2008, it's | :01:40. | :01:43. | |
rebounded - and its growth has continued to outstrip the average | :01:43. | :01:49. | |
growth of the OECD group of developed economies. If we look at | :01:49. | :01:56. | |
the last eight years, of economic Brazil, everything is going | :01:56. | :02:01. | |
fantastic for this country - from foreign investment, from macro- | :02:01. | :02:07. | |
economic policy, from the middle class, and a very stable government. | :02:07. | :02:11. | |
Brazil's 200 million consumers are an increasingly important export | :02:11. | :02:13. | |
market for the frustrated manufacturers of developed | :02:13. | :02:18. | |
economies. Western investors are increasingly interested in the | :02:18. | :02:25. | |
stocks of Brazil's corporate giant, like oil producer Petrolpros. | :02:25. | :02:29. | |
Analysts warn Brazil is a much more risky place to invest than | :02:29. | :02:32. | |
developed economies. Brazil is an exciting investment area, there's | :02:32. | :02:36. | |
no doubt about it. It is also much more volatile. We look at the | :02:36. | :02:39. | |
volatile market returns in the UK last year, when the FTSE was down | :02:39. | :02:43. | |
around 2%. The Brazilian index was down around 22%. Over the longer | :02:43. | :02:47. | |
period, the Brazilian equities have really done very, very well, but | :02:47. | :02:52. | |
they are definitely more volatile, and hence for higher-risk investors. | :02:52. | :02:54. | |
Brazil's economy has never been on such a roll. The question is, how | :02:54. | :03:01. | |
long will the good times last? The worry is rising prices, with many | :03:01. | :03:03. | |
economists criticising the central bank for reducing interest rates | :03:03. | :03:09. | |
while the inflation rate still tops 5% per annum. There's always the | :03:09. | :03:15. | |
fear inflation could run out of control again. | :03:15. | :03:18. | |
The governor of Australia's central bank says interest rates are | :03:18. | :03:23. | |
appropriate for the moment, as the bank left rates on hold at 4.25%. | :03:23. | :03:26. | |
Let's go to Rico Hizon in Singapore, with more on that. Nice to see you, | :03:26. | :03:29. | |
Rico. Sally. Tell us about this latest move by the Australian | :03:29. | :03:38. | |
central bank. Well, they seem to be quite upbeat | :03:38. | :03:41. | |
about the local economy, Sally, despite the external weakness in | :03:41. | :03:45. | |
the eurozone and the still- recovering economy in the United | :03:45. | :03:49. | |
States. It is the second consecutive month rates have been | :03:49. | :03:54. | |
kept on hold following two rounds of 0.25% rate reductions in | :03:54. | :03:58. | |
November and December, Sally. The bank did not hold a meeting in | :03:59. | :04:02. | |
January. The central bank of Australia remains upbeat on | :04:02. | :04:07. | |
economic outlook thanks to a huge boom in resource inments, as mining | :04:07. | :04:12. | |
companies rush to meet the demands of China and India. And with | :04:12. | :04:17. | |
inflation, Sally, still well contained within the RBA's long- | :04:17. | :04:23. | |
term target band of 2% to 3%, when you talk to analysts, they suspect | :04:23. | :04:26. | |
there could be scope for perhaps one more cut in the coming months. | :04:26. | :04:30. | |
Most economists note that the only change to the central bank's stand | :04:30. | :04:33. | |
was the call for better productivity, which is the only way | :04:33. | :04:39. | |
to keep inflation low. But there were some contrarian views, Sally, | :04:39. | :04:41. | |
with this latest decision by the Australian central bank. They say | :04:41. | :04:45. | |
that to leave rates on hold at levels many times higher than most | :04:45. | :04:50. | |
of the developed world is simply unjustifiable, as most Australians | :04:50. | :04:54. | |
in the country simply cannot afford for the Aussie dollar to remain as | :04:54. | :04:59. | |
high as it is now. They say, if it stays this high for much longer, it | :04:59. | :05:05. | |
will have a devastating effect on jobs and the structure of the | :05:05. | :05:08. | |
economy, especially in the non- resource states. Sally. As you say, | :05:08. | :05:13. | |
it's quite a tricky balancing act. China is, of course, Australia's | :05:13. | :05:17. | |
biggest trading partner. China only saying yesterday they're reducing | :05:17. | :05:27. | |
:05:27. | :05:27. | ||
their growth prospects? Absolutely. We saw China basically downgrading | :05:27. | :05:32. | |
its economic forecast for 2012 from 8% to 7.5%. Still, the Aussie | :05:32. | :05:35. | |
mining companies are very bullish. I spoke with one analyst earlier | :05:35. | :05:41. | |
this week, and he said that despite prices coming off, it is still a | :05:41. | :05:46. | |
very profitable for Aussie mining companies such as Rio Tinto, BHP | :05:46. | :05:50. | |
Billiton, and they will still be making money, despite a slowing | :05:50. | :05:54. | |
economy in China. The margins, they say, are still very wide, and those | :05:54. | :05:59. | |
margins still make a lot of money for the Aussie mining companies, | :05:59. | :06:02. | |
which are basically the linchpin, the backbone, of the Australian | :06:02. | :06:07. | |
economy. Sally. Thanks very much indeed, Rico in Singapore. Let's | :06:07. | :06:11. | |
have a look at some other business stories now. Disruptions are | :06:11. | :06:16. | |
expected on the London-to-Paris Eurostar service this morning. A | :06:16. | :06:19. | |
number of trains have been cancelled after a cable fell on the | :06:19. | :06:23. | |
high-speed line in France, causing major delays last night. Eurostar | :06:23. | :06:27. | |
told passengers with tickets for cancelled trains to exchange them | :06:27. | :06:32. | |
for another day if at all possible. Greece is scrambling to complete | :06:32. | :06:38. | |
its debt swap with private bond holders by Thursday of this week. | :06:38. | :06:43. | |
The Finance Minister warned that the creditors -- warned creditors | :06:43. | :06:46. | |
this was the best deal they would get, and he would not hesitate to | :06:46. | :06:50. | |
use new laws to force them to act if they did not do so voluntarily. | :06:50. | :06:53. | |
A dozen financial institutions from the group will help negotiate the | :06:53. | :06:57. | |
deal. They have already agreed. -- the deal they have already | :06:57. | :07:00. | |
agreed. The British Retail Consortium has | :07:00. | :07:05. | |
warned any revival of sales on the UK High Street is an illusion. It | :07:05. | :07:08. | |
says like-for-like sales fell 0.3% in February, compare would the same | :07:08. | :07:11. | |
time last year. The group says, while food sales rose because of | :07:11. | :07:14. | |
people stocking up in the cold weather, sales of non-food goods | :07:15. | :07:20. | |
continued to fall. Japanese car-maker Nissan is to | :07:20. | :07:24. | |
build a new model at its Sunderland plant in the north-east of the UK. | :07:24. | :07:27. | |
It will create up to won it two,000 jobs. The car will go into | :07:27. | :07:34. | |
production in the middle of 2013. After an investment programme worth | :07:34. | :07:38. | |
nearly $200 million. Eurozone growth figures out later | :07:38. | :07:42. | |
this morning are expected to confirm initial estimates of a 0.3% | :07:42. | :07:45. | |
contraction in the fourth quarter of last year. It would be the first | :07:45. | :07:55. | |
quarterly fall since the second quarter of 2009. | :07:55. | :07:58. | |
Europe's top car executives have descended on Geneva for the annual | :07:58. | :08:03. | |
motor show, where a whole host of new cars will be unveiled. It | :08:03. | :08:08. | |
starts today against a backdrop of austerity in Europe, which means | :08:08. | :08:12. | |
finding buyers for new models won't be easy. Let me tell you new | :08:12. | :08:15. | |
information about this. America, Japan and emerging markets are much | :08:15. | :08:21. | |
more prosperous for the industry. Jaguar, Land Rover, now owned by | :08:21. | :08:24. | |
India's Tata Motors, is comang among the companies to showcase two | :08:24. | :08:27. | |
new vehicles. There are reports of a possible tie-up with one of | :08:27. | :08:32. | |
China's largest car firms, Cherry Automobile. There are rumours that | :08:32. | :08:36. | |
suggest the deal could be worth $2.7 billion. We are struggling | :08:36. | :08:39. | |
right now to try and connect up with the Geneva Motor Show, which | :08:39. | :08:44. | |
does kick off today. I was hoping to speak to, as I said earlier, the | :08:44. | :08:48. | |
CEO, Ralph Speff. We'll try and continue to see if we can link up | :08:48. | :08:51. | |
with him. In the meantime, I want to tell you about the financial | :08:51. | :08:53. | |
markets. Of course, one of the key questions I was going to ask him | :08:53. | :08:58. | |
was whether they are going to do a deal with Cherry Automobile of | :08:58. | :09:01. | |
China. If they were to do that, that would mean they would have | :09:01. | :09:03. | |
local production very close to Shanghai, and of course chine saw | :09:03. | :09:07. | |
one of the most exciting car markets in the world at the moment, | :09:07. | :09:11. | |
with enormous growth and future growth in that market. If we can, | :09:11. | :09:15. | |
we will talk to him in the next few minutes. If we can't, I will talk | :09:15. | :09:18. | |
you through the markets. Maybe we'll talk to him later on BBC | :09:18. | :09:22. | |
World News. We do have him, apparently! The wonders of modern | :09:22. | :09:27. | |
technology. Let's now speak to Ralph Stepff, the chief executive | :09:27. | :09:30. | |
of Jaguar Land Rover. Good to see you. I'm relieved you can join us | :09:31. | :09:35. | |
on the programme. We've talked about you coming up all morning. | :09:35. | :09:38. | |
Cherry Automobile of China - a lot of rumours and speculation you're | :09:38. | :09:42. | |
about to do a deal with them. Is that true? Yeah, there are a lot of | :09:42. | :09:46. | |
rumours in the market. It's absolutely true that we have to | :09:46. | :09:51. | |
have a local partner in China to produce and to get a licence to | :09:51. | :09:57. | |
develop vehicles in China. We are in discussions over the government. | :09:57. | :10:00. | |
Whenever we are prepared and, at the right moment we can inform you | :10:00. | :10:05. | |
about that, I can't reveal the day any -- reveal today any news. | :10:05. | :10:08. | |
right. We will watch with great interest to hear more on that. You | :10:08. | :10:13. | |
make most of your vehicles here in the UK. How important, still, is | :10:13. | :10:16. | |
the European market to you? Because obviously it's a market that's | :10:16. | :10:26. | |
:10:26. | :10:28. | ||
struggling in terms of sales. Europe is a very important market, | :10:28. | :10:33. | |
especially for our customers. They do like the very special | :10:33. | :10:39. | |
combination - the unique combination - of the very special | :10:39. | :10:47. | |
design, engineering excellence, and last but not least, authentic | :10:48. | :10:52. | |
vehicle s. This gives us an advantage all around the world. | :10:52. | :10:54. | |
Clearly you say Europe is very important, you make most of your | :10:55. | :10:59. | |
cars here in the UK, but you want to make cars in China. You've also | :10:59. | :11:02. | |
talked about it a desire to make cars in North America, Brazil. | :11:02. | :11:08. | |
You've just opened a new plant in India. Does this mean you're going | :11:08. | :11:16. | |
to reduce your production here in the UK? Eventually? No, we are a | :11:16. | :11:23. | |
British company. We are producing the majority of our cars in the UK. | :11:23. | :11:26. | |
By the way, there's even an opportunity coming up - because our | :11:26. | :11:30. | |
vehicles are so highly sought after - to increase production even | :11:30. | :11:40. | |
:11:40. | :11:46. | ||
further. Where will you do that? have opportunities to do it in one | :11:46. | :11:51. | |
or the other location. Nevertheless, we could go to China. China is the | :11:51. | :11:55. | |
most important market in the world. There's more than 80 million | :11:55. | :11:59. | |
vehicles. That's clear that we also have to be in China. But we are | :12:00. | :12:06. | |
producing, in China, and we will produce in India and in Brazil, not | :12:06. | :12:12. |