:00:00. > :00:26.tells financial markets that the Those are the latest headlines.
:00:26. > :00:28.tells financial markets that the threat of a US debt default is real.
:00:28. > :00:49.Hello and a warm welcome to World Plus it is Europe's busiest airport,
:00:49. > :00:50.Hello and a warm welcome to World programme, why the shutdown could
:00:50. > :00:54.affect the price of the food on programme, why the shutdown could
:00:54. > :00:57.breakfast table. First of all, as you have been hearing, the latest
:00:57. > :01:01.meeting between President Obama you have been hearing, the latest
:01:01. > :01:03.senior congressional leaders have ended without agreement yet again on
:01:03. > :01:08.the budget dispute that has led ended without agreement yet again on
:01:08. > :01:12.shutdown of many US government services since Tuesday. President
:01:12. > :01:16.Obama has been doing his best to harness the power of financial
:01:17. > :01:21.markets in his budget battle with the Republicans. On Wednesday he
:01:21. > :01:25.used an interview with financial television network CNBC to warn
:01:25. > :01:28.used an interview with financial Street it should be concerned that a
:01:28. > :01:31.conservative faction of Republicans is willing to allow the country
:01:31. > :01:33.conservative faction of Republicans default on its debt. The broadcast
:01:33. > :01:37.came after the close of the US markets, which have so far shown a
:01:37. > :01:43.muted reaction to this political deadlock. Earlier the President
:01:43. > :01:48.muted reaction to this political met the bosses of America's biggest
:01:48. > :01:52.So far the markets have appeared numb in the face of government
:01:52. > :01:57.dysfunction. At the time for such calm on Wall Street is over. When
:01:57. > :02:09.you have a situation in which a faction is willing potentially to
:02:09. > :02:14.obligations, then we are in trouble. Hours earlier at the White House, he
:02:14. > :02:16.met with more than a dozen worlds —— Wall Street bank chiefs. Looking
:02:16. > :02:22.less like masters of the universe Wall Street bank chiefs. Looking
:02:22. > :02:24.less like masters of the universe they spoke of how bad things might
:02:24. > :02:29.get if America were unable to find itself and pay its bills. Goldman
:02:29. > :02:37.Sachs's chief executive summed it up precedent for a shutdown. There
:02:37. > :02:40.Sachs's chief executive summed it up no precedent for default. We are the
:02:40. > :02:43.reserve currency of the world. Payments have to go out. If money
:02:43. > :03:02.boss of Bank of America. There is no Payments have to go out. If money
:03:02. > :03:06.boss of Bank of America. There is no debate that the seriousness of the
:03:06. > :03:09.US not paying its debts, be it small—business loans, up to the
:03:09. > :03:11.treasury notes and bills, it is small—business loans, up to the
:03:12. > :03:17.most serious thing we have. We witnessed it in August 2011. We
:03:17. > :03:19.most serious thing we have. We the ramifications as a sled and
:03:19. > :03:23.most serious thing we have. We economy. The 2008 financial crisis
:03:23. > :03:26.government shelter. Now the bank bosses fear the government could
:03:26. > :03:34.push them back into the financial The budget crisis in the States
:03:34. > :03:43.push them back into the financial having an effect on President Obama
:03:43. > :03:45.What is happening as far as this trip is concerned? He was due to
:03:46. > :03:57.Malaysia and the Philippines as trip is concerned? He was due to
:03:57. > :04:04.tries to unlock this political gridlock in Washington which could
:04:04. > :04:10.economy, but also Asia which exports many of its products to the United
:04:10. > :04:12.States. The White House has not ruled out the possibility of Mr
:04:12. > :04:21.Obama cancelling the remaining legs of his trip, the Apec summit in
:04:21. > :04:24.Obama cancelling the remaining legs Southeast Asian meetings in Brunei.
:04:24. > :04:28.His four nation Asian tour is being looked forward to in the region
:04:28. > :04:41.key economic partner and is part of looked forward to in the region
:04:41. > :05:06.priorities in the region. His visit America's initiative. The south—east
:05:06. > :05:10.priorities in the region. His visit Asian treaty allies. Thank you very
:05:10. > :05:14.much. The fallout from the shutdown could have an impact on the price of
:05:14. > :05:18.food on your breakfast table. That is because it is unlikely the US
:05:18. > :05:24.Department of agriculture will be estimates. Farmers and traders
:05:24. > :05:28.around the world rely on this date, which can cause huge swings in the
:05:28. > :05:31.price of corn, wheat, soya beans, and many other commodities. A Europe
:05:31. > :05:38.business correspondent has the America has planted, but with no
:05:38. > :05:46.official figures know people quite know how much it has wreaked. As the
:05:46. > :05:50.world's largest grain exporter, America's actual crop yields matter.
:05:50. > :06:01.Feeding into what we all pay for exporter. Without all the state
:06:01. > :06:05.only have recent history to go on. When it comes to the breakfast table
:06:05. > :06:10.it is cereals which have seen some of the biggest price cuts. Take
:06:10. > :06:13.it is cereals which have seen some week for example, it is 60% cheaper
:06:13. > :06:28.than it was one year ago. The story is different for meat. Frozen orange
:06:28. > :06:33.concentrate is 11% more expensive. The commodity markets may be unsure
:06:33. > :06:35.of the 2013 harvest has proved as good as many hoped. There are some
:06:35. > :06:39.concerns about soya bean yields good as many hoped. There are some
:06:39. > :06:42.little August rain on the corn belt. There is exported data, there's
:06:42. > :06:48.are surveys going out and checking There is exported data, there's
:06:48. > :06:48.are surveys going out and checking the yields and measuring heights. It
:06:48. > :06:54.some traders might see this as an the yields and measuring heights. It
:06:54. > :06:57.some traders might see this as an opportunity to trade on preferential
:06:57. > :07:01.information. There could be some traders who have access to deep
:07:01. > :07:04.knowledge on the markets. They may take advantage of that at a time
:07:04. > :07:15.when the rest of the world's does not have access to this because
:07:15. > :07:29.the downing of the USDA. The size of the crop in the US also shapes
:07:29. > :07:34.the downing of the USDA. The size of Britain's aviation regulator will
:07:34. > :07:36.rule on how Europe's busiest port can charge airlines in learning
:07:37. > :07:38.fees. The Civil Aviation Authority is the industry watchdog which
:07:39. > :07:52.average, 200,000 passengers fly is the industry watchdog which
:07:52. > :08:01.and out Heathrow every day. The charges passed on as a service fee.
:08:01. > :08:05.It is capped at $50 for shortfall —— shorthaul flights. What is the
:08:05. > :08:14.likely outcome and what will it shorthaul flights. What is the
:08:14. > :08:17.for travellers? I have said that it is three times more than other
:08:18. > :08:25.airports charge. How have they gotten away with it? Heathrow, as
:08:25. > :08:37.interest, is a different airport to anywhere else on the planet. London
:08:37. > :08:41.is the world capital of aviation. The problem with Heathrow is that
:08:42. > :08:47.because it is effectively full there The problem with Heathrow is that
:08:47. > :08:49.because it is effectively full there are lots in essence. The actual
:08:49. > :08:53.market would say that we judge people may be $100 per passenger,
:08:53. > :08:58.which would be excessive. Therefore the regulator controls what Heathrow
:08:58. > :09:02.may charge. At the way that is the regulator controls what Heathrow
:09:02. > :09:04.may charge. At the way that is worked out is arcane. It is not
:09:04. > :09:13.may charge. At the way that is do with the actual marginal cost of
:09:13. > :09:21.bit strong. They have allowed above agreement? I think that would be a
:09:21. > :09:24.bit strong. They have allowed above at it is to say that from a flight
:09:24. > :09:29.pay $65 as your passenger service from Heathrow to Los Vegas you would
:09:29. > :09:38.pay $65 as your passenger service fee, that goes to the airport. If
:09:38. > :09:47.The airlines are furious at the regulators get it right? Indications
:09:47. > :09:58.are that they will allow only below inflation increases. The airports is
:09:58. > :10:01.that if they cannot get the fees that they need then the investors
:10:01. > :10:07.will put their money elsewhere and Heathrow will not get the necessary
:10:07. > :10:15.upgrades it needs. It is basically a shoehorned into the 21st century.
:10:15. > :10:17.background of London being starved of runways. Nothing you since the
:10:17. > :10:21.Second World War. That is a big of runways. Nothing you since the
:10:21. > :10:27.we will no doubt be talking about soon. Thank you very much. We will
:10:27. > :10:29.keep you up—to—date on that story. Before I go, a quick flash of the
:10:29. > :10:37.We have been talking about the fact that these markets so far have maybe
:10:37. > :10:40.been a bit calm and muted. Not reacting aggressively to what has
:10:41. > :10:42.been going on. That could change soon. We will discuss that shortly
:10:42. > :10:49.by me look at the newspapers. The main markets are down just lightly.