:00:13. > :00:19.salary. For the latest financial news with Sally.
:00:19. > :00:23.You're watching the World Business Report on BBC. The headlines: A
:00:23. > :00:29.significant slowdown, a warning from the top Bank are about the
:00:29. > :00:34.world's biggest economy. -- Bank us. A possible green light for
:00:34. > :00:42.government cash for struggling carmaker Peugeot if they plane to
:00:42. > :00:46.reduce the number of job cuts. -- if they plan to reduce. The US
:00:46. > :00:52.economy is losing momentum, a growth forecasts had been sliced
:00:52. > :00:59.and unemployment remains stubbornly high. Now, a risk of recession.
:00:59. > :01:03.That is the gloomy picture painted by the most senior banker, Ben
:01:03. > :01:09.Bernanke. He will appear before lawmakers and markets would be
:01:09. > :01:14.anxious to hear about what to be danced to markets. The federal
:01:14. > :01:18.chairman painted a grim picture. He said the economy was growing, but
:01:18. > :01:25.more slowly than a few months ago. He pointed to a weakness in
:01:25. > :01:28.manufacturing, a former bright spots, and a slump in job creation
:01:28. > :01:34.and declining consumer confidence. He said the Federal Reserve was
:01:34. > :01:38.ready to add stimulus if things got worse. As on previous occasions, he
:01:38. > :01:43.held out little prospect for immediate action. You are looking
:01:43. > :01:48.carefully at the economy trying to judge whether or not the loss of
:01:48. > :01:52.momentum we have seen recently is enduring. And whether or not the
:01:52. > :01:58.economy is continuing to make progress towards its unemployment
:01:58. > :02:03.and more satisfactory labour conditions. If that does not occur,
:02:03. > :02:09.we will need to consider additional steps. His warning was to Congress.
:02:09. > :02:15.He said the economy will slip into recession, albeit a mild recession,
:02:15. > :02:21.if Congress failed to take action against a fiscal cliff. This refers
:02:21. > :02:28.to the combination of Bush era job cuts and cards in shop --
:02:28. > :02:34.government spending that are due to take effect at the end of the air -
:02:35. > :02:40.- of the Year. He also spoke about the interest rate rigging scandal.
:02:40. > :02:49.He said the Libor scandal Lee is structurally flawed and does not
:02:49. > :02:56.hopeful confidence in the system -- is structurally flawed. Sir Mervyn
:02:56. > :03:06.King was talents on the spy UK politicians yesterday. This was his
:03:06. > :03:10.response -- was challenged on at these. -- on that the spy. You have
:03:10. > :03:20.rules to prevent this. This is not the same as saying that you have
:03:20. > :03:24.
:03:24. > :03:27.evidence. I am joined by a market strategist at CIB. A gloomy picture
:03:27. > :03:37.painted by two of the biggest bankers in the world. It is about
:03:37. > :03:40.who said what. The other point is that we have had a system that is
:03:40. > :03:48.relied on as Sir Mervyn King said on self regulation that is now
:03:48. > :03:51.being said to be seen as unworkable and uncertain. That is the suit as
:03:51. > :03:58.far as the Libor scandal is concerned. In Japan, they are
:03:58. > :04:02.talking about focusing on it who is involved in their scandal. If we
:04:02. > :04:07.were to restructure the Libor scandal, would that be the same for
:04:07. > :04:12.the other ones? We have seen other systems globally whether are seeing
:04:12. > :04:16.that people are not keen to participate for fear that at some
:04:16. > :04:22.stage the participation could come back to back them. That throws up
:04:22. > :04:26.some interesting consequences. Less activity in the markets that could
:04:26. > :04:30.lead to greater liquidity. That is an environment that we do not want
:04:30. > :04:35.to go down. It is a case that the system has been in place for a
:04:35. > :04:39.prolonged period. As system is linked to short-term Treasury bills
:04:39. > :04:43.which can be influenced by central banks are aware that the
:04:43. > :04:47.jurisdiction is. The problem is that derivatives contracts had been
:04:47. > :04:50.linked to the specific interest rates. That would involve a huge
:04:50. > :04:54.amount of structural change. Let's look at the US economy. Everyone
:04:54. > :05:00.wants to know what Ben Bernanke is thinking and what they are poised
:05:00. > :05:04.to do to help the US economy. He was quite downbeat. He said a mild
:05:04. > :05:10.recession is possible if things don't change in the near future?
:05:10. > :05:14.is difficult to be anything other than a relatively downbeat.
:05:14. > :05:21.Internationally and domestically he is under pressure. The second
:05:21. > :05:25.quarter in the US was subdued. They could be a slight improvement. We
:05:25. > :05:30.have an external environment, the eurozone on one hand, the Chinese
:05:30. > :05:36.on the other. It is difficult for Ben Bernanke to be anything but a
:05:36. > :05:43.relatively subdued. What measures were introduced to help the US
:05:43. > :05:47.economy? I will be surprised if there will be anything. We would
:05:47. > :05:52.have a question and answer situation. We will have to wait
:05:53. > :06:02.till the end of August until any substantial decision. There will be
:06:02. > :06:10.a get to get that at the end of August before the September meeting.
:06:10. > :06:17.-- get together. Let's have a look at other business stories. HSBC
:06:17. > :06:25.head of compliance resigned as a US Senate here at -- hearing and other
:06:25. > :06:31.executives apologise. They allow this money laundering to take place
:06:31. > :06:35.for drug cartels and terrors. The French Socialists company is
:06:35. > :06:40.tearing up a key labour market policy introduced by the former
:06:40. > :06:47.president. Taxes would be reintroduced for all other than
:06:47. > :06:53.companies that have less than 20 employees. Intel is warning that it
:06:53. > :06:57.for me is its next profit forecast because of the weak economy. The
:06:57. > :07:04.second-quarter income was down more than 4% from the same period last
:07:05. > :07:09.year. It makes chips for 80% of the world's personal computers. BHP
:07:10. > :07:18.bulletin has boosted its iron ore by 15% in the last three months,
:07:18. > :07:25.despite a weaker demand from China. They say decoy be a 12th
:07:25. > :07:30.consecutive record. -- it could be. Mario Monti says that's easily
:07:30. > :07:37.could default. He wants confirmation that the Governor will
:07:38. > :07:43.resign. Sicily has a special status with a debt of 5 billion euros. It
:07:43. > :07:53.has an interest repayment of 500 million euros. The French Industry
:07:53. > :07:53.
:07:53. > :08:03.Minister will meet the TAFE executive of Nissan -- the teeth
:08:03. > :08:07.
:08:07. > :08:12.executive of Peugeot. Purcell is one of the cornerstones of the
:08:12. > :08:18.manufacturing sector. They employ a 100,000 people. They are producing
:08:18. > :08:23.too many cars for a declining market. Peugeot wants to close its
:08:23. > :08:27.plant near Paris at the end of next year and lay-off 8,000 staff. The
:08:27. > :08:33.government says that its managers need to soften the blow to workers.
:08:33. > :08:37.In return, it will of the them a package of state aid.
:08:37. > :08:41.government is looking into some local measures such as encouraging
:08:41. > :08:46.French car buyers to buy cars manufactured in France. The problem
:08:46. > :08:50.is that the car industry is very much an international business and
:08:50. > :09:00.their problems will not be solved by raising sales in France alone.
:09:00. > :09:00.
:09:00. > :09:05.Two decades ago, they dominated the core markets of France, Italy and
:09:05. > :09:11.Spain in 2005. It builds up a cash pile that they are burning through
:09:11. > :09:19.now. Now, they are relying on a revival in its fortunes on a new
:09:19. > :09:23.model of car. Candy is put them back in the black? It cannot make
:09:23. > :09:30.up the shortfall. Be it must be cost cuts, but that is why a
:09:30. > :09:37.factory closure comes in. Over the next six happened 12 months, we
:09:37. > :09:42.will see what the contributions by the government make. It would not
:09:42. > :09:46.be a solution to the problem. new models and however much the