Browse content similar to 20/06/2013. Check below for episodes and series from the same categories and more!
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BBC World News. Now for the latest financial news with World Business | :00:02. | :00:12. | |
:00:12. | :00:20. | ||
Time to face life after QE - Fed chief Ben Bernanke says he'll start | :00:20. | :00:26. | |
winding down stimulus measures if the US economy keeps improving. | :00:27. | :00:30. | |
Plus, back on the market - the UK Government says preparing to sell | :00:30. | :00:40. | |
:00:40. | :00:42. | ||
its stake in bailed-out bank Lloyds. Welcome to World Business Report. | :00:42. | :00:45. | |
I'm Sally Bundock. Also in the programme - no end to the Eurozone | :00:45. | :00:52. | |
recession this year, with unemployment continuing to rise. | :00:52. | :00:55. | |
It was the news global financial markets were waiting for - and | :00:55. | :00:59. | |
fearing. The head of the US Federal Reserve Ben Bernanke has confirmed | :00:59. | :01:01. | |
he'll start to wind down his massive economic stimulus programme | :01:01. | :01:04. | |
this year and end it altogether next year if America's economy | :01:04. | :01:14. | |
continues to improve as it is doing. Let's just remind ourselves of what | :01:14. | :01:17. | |
that programme is. Known as quantitative easing, the Fed has | :01:17. | :01:20. | |
been keeping interest rates close to zero, below 0.25% and pumping | :01:20. | :01:22. | |
$85 billion a month into the economy by buying US government | :01:22. | :01:32. | |
bonds. It has had a vast global impact, boosting stock markets and | :01:32. | :01:39. | |
assets around the world. But it could soon be coming to an end. | :01:39. | :01:41. | |
Samira Hussain has been at the Federal Reserve in Washington and | :01:42. | :01:51. | |
:01:52. | :01:53. | ||
sent his report. In assessing the state of the American economy, the | :01:53. | :01:58. | |
chairman of the US Federal Reserve was fairly optimistic. He said the | :01:58. | :02:04. | |
US is seeing growth. Given those gains, many people are asking when | :02:04. | :02:07. | |
the central bank will start pulling back support from the hip American | :02:08. | :02:12. | |
economy. The groans the chairman, the unemployment rate would be to | :02:13. | :02:18. | |
fall significantly. Other economic indicators, but the number of | :02:18. | :02:21. | |
people participating in the labour force, would need to increase | :02:21. | :02:26. | |
significantly. I would like to emphasise the point that our policy | :02:26. | :02:35. | |
is in no way predetermined. It will depend on the incoming data and the | :02:35. | :02:40. | |
ongoing situation. If things go better than expected, we can reduce | :02:40. | :02:46. | |
its more quickly. If it becomes less favourably, or financial | :02:46. | :02:50. | |
conditions are inconsistent with the process in the labour markets, | :02:50. | :02:57. | |
it just what will be delayed. US markets have been jittery, | :02:57. | :03:01. | |
reacting to any possibility that the pullback may be started earlier | :03:01. | :03:07. | |
than expected. Our policies are tied to how the outlook it evolves. | :03:07. | :03:17. | |
:03:17. | :03:18. | ||
They should provide some comfort to markets. There -- they should | :03:18. | :03:24. | |
understand we are providing would have the support is necessary. | :03:24. | :03:31. | |
Stimulus may be around for the next while. | :03:31. | :03:36. | |
Will have a look at another key economy. There is another sign this | :03:36. | :03:39. | |
morning that the slowdown in growth in China is deepening. Rico Hizon | :03:39. | :03:47. | |
is at our Asia business hub in Singapore. Thick smog behind you. | :03:48. | :03:53. | |
Tell us about what is going on in China. Part of all Asia and | :03:53. | :03:59. | |
Singapore. Right now we're seeing a slowdown in the manufacturing | :03:59. | :04:08. | |
activity on the mainland. In the month of June. It is at its lowest | :04:08. | :04:11. | |
point in nine months. That is due to weaker demand for Chinese | :04:11. | :04:20. | |
products. HSBC's preliminary index fell to a reading of 48.3. A | :04:20. | :04:26. | |
reading below 50 indicates a contraction. This follows a slew of | :04:26. | :04:36. | |
:04:36. | :04:39. | ||
weak economic numbers. When you speak with economists, they said | :04:39. | :04:45. | |
the drop in manufacturing output raises questions over whether there | :04:45. | :04:52. | |
is a recovery taking place in the Chinese economy. Growth slowed | :04:52. | :04:55. | |
unexpectedly in the first quarter. Analysts have now cut the growth | :04:55. | :05:04. | |
outlook for the year. The basis his responses from 90% of 420 | :05:04. | :05:09. | |
manufacturing companies surveyed every month. The full data will be | :05:09. | :05:14. | |
rich -- relies on 1st July. Britain's finance minister, | :05:14. | :05:16. | |
Chancellor George Osborne, has signalled the UK Government is | :05:16. | :05:20. | |
ready to start selling its shares in Lloyds Banking Group. He made | :05:20. | :05:23. | |
the comments as part of his annual address to top London Bankers, | :05:23. | :05:26. | |
known as the Mansion House speech. But he acknowledged a similar sale | :05:26. | :05:33. | |
of rival Royal Bank of Scotland could be some way off. The British | :05:33. | :05:36. | |
taxpayer has owned 39% of Lloyds and 81% of RBS since they were | :05:36. | :05:42. | |
bailed out in the 2008 crisis. A sale of Lloyds shares could be this | :05:42. | :05:47. | |
autumn. But any re-privatisation of RBS would have to wait until after | :05:47. | :05:52. | |
the next election. And the Chancellor will consider if RBS | :05:52. | :05:55. | |
should be split up, with its weak assets like bad property loans put | :05:55. | :06:05. | |
:06:05. | :06:06. | ||
into a so-called bad bank. Here's what he had to say about Lloyds. | :06:06. | :06:10. | |
Lloyd's is in a good position. Investor interest is up. Shares are | :06:10. | :06:16. | |
trading at the price were selling would reduce the national debt. | :06:16. | :06:21. | |
That is something we all want to see. We are actively considering | :06:21. | :06:26. | |
options with a share sales. We will only proceed if we get value for | :06:26. | :06:33. | |
the taxpayer. We have no prefix timescale of disposal. An | :06:33. | :06:37. | |
institutional placement is likely to be the most effective way of | :06:37. | :06:46. | |
managing risk and getting everything back. Five years on, we | :06:46. | :06:49. | |
can take the first steps to returning Lloyd's to the private | :06:49. | :06:55. | |
sector. For later shares and their sales, we will consider a retail | :06:55. | :06:59. | |
offering to the general public. will talk more about that when we | :07:00. | :07:04. | |
review the newspapers in about five minutes. As finance ministers from | :07:04. | :07:06. | |
the Eurozone gather in Luxembourg, there's a warning this Thursday | :07:06. | :07:09. | |
that Europe's recession is getting worse, with no sign of recovery | :07:09. | :07:11. | |
until next year. According to a report by | :07:11. | :07:14. | |
accountants Ernst & Young - the combined economies of the nations | :07:14. | :07:19. | |
sharing the Euro will shrink 0.6% in 2013. That's a bigger | :07:19. | :07:22. | |
contraction than last year - and they see no return to growth until | :07:22. | :07:28. | |
2014. Unemployment will also keep rising this year - hitting a peak | :07:28. | :07:35. | |
of 12.7% in the first quarter of 2014. Marie Diron is senior | :07:35. | :07:45. | |
economist at Ernst &Young. You're out here with good news for us. | :07:45. | :07:50. | |
am not, I'm afraid. This recession is going on for longer than we had | :07:50. | :07:56. | |
expected. It has been going for six quarters. We believe it is coming | :07:56. | :08:03. | |
to an end. The recovery is very weak. The only positivity is the | :08:03. | :08:10. | |
relaxation of fiscal policies. One look elsewhere in the economy, we | :08:10. | :08:14. | |
have just said about China not growing as strongly as we thought, | :08:14. | :08:21. | |
that is important for the eurozone. The domestic side of the economy is | :08:21. | :08:27. | |
still facing higher unemployment. Why is this phase taking longer | :08:27. | :08:31. | |
than we first thought it would? Is it because of the key issues you | :08:31. | :08:38. | |
have just mentioned? It is. Unemployment is a big one. It is a | :08:38. | :08:43. | |
symptom of a deeper structuring. The reshaping of the eurozone is | :08:43. | :08:48. | |
necessary. Companies are going through their pay rolls and | :08:48. | :08:52. | |
assessing how many staff they need. They are going through balance | :08:52. | :08:59. | |
sheets and trying to reduce. All this combined makes for quite a | :08:59. | :09:06. | |
long process. In 2014 you say the eurozone could return to growth. | :09:06. | :09:13. | |
When? Made year, when the think? expect some slight positive numbers | :09:13. | :09:20. | |
from the beginning of the year. The fiscal drag will be less. We expect | :09:20. | :09:25. | |
some recovery in the rest of the world. Some areas are already being | :09:25. | :09:33. | |
more competitive in the eurozone. Thank you. That's all from World | :09:33. | :09:38. |