03/10/2013 World Business Report

tells financial markets that the Those are the latest headlines.

tells financial markets that the threat of a US debt default is real.

Hello and a warm welcome to World Plus it is Europe's busiest airport,

Hello and a warm welcome to World programme, why the shutdown could

affect the price of the food on programme, why the shutdown could

breakfast table. First of all, as you have been hearing, the latest

meeting between President Obama you have been hearing, the latest

senior congressional leaders have ended without agreement yet again on

the budget dispute that has led ended without agreement yet again on

shutdown of many US government services since Tuesday. President

Obama has been doing his best to harness the power of financial

markets in his budget battle with the Republicans. On Wednesday he

used an interview with financial television network CNBC to warn

used an interview with financial Street it should be concerned that a

conservative faction of Republicans is willing to allow the country

conservative faction of Republicans default on its debt. The broadcast

came after the close of the US markets, which have so far shown a

muted reaction to this political deadlock. Earlier the President

muted reaction to this political met the bosses of America's biggest

So far the markets have appeared numb in the face of government

dysfunction. At the time for such calm on Wall Street is over. When

you have a situation in which a faction is willing potentially to

obligations, then we are in trouble. Hours earlier at the White House, he

met with more than a dozen worlds —— Wall Street bank chiefs. Looking

less like masters of the universe Wall Street bank chiefs. Looking

less like masters of the universe they spoke of how bad things might

get if America were unable to find itself and pay its bills. Goldman

Sachs's chief executive summed it up precedent for a shutdown. There

Sachs's chief executive summed it up no precedent for default. We are the

reserve currency of the world. Payments have to go out. If money

boss of Bank of America. There is no Payments have to go out. If money

boss of Bank of America. There is no debate that the seriousness of the

US not paying its debts, be it small—business loans, up to the

treasury notes and bills, it is small—business loans, up to the

most serious thing we have. We witnessed it in August 2011. We

most serious thing we have. We the ramifications as a sled and

most serious thing we have. We economy. The 2008 financial crisis

government shelter. Now the bank bosses fear the government could

push them back into the financial The budget crisis in the States

push them back into the financial having an effect on President Obama

What is happening as far as this trip is concerned? He was due to

Malaysia and the Philippines as trip is concerned? He was due to

tries to unlock this political gridlock in Washington which could

economy, but also Asia which exports many of its products to the United

States. The White House has not ruled out the possibility of Mr

Obama cancelling the remaining legs of his trip, the Apec summit in

Obama cancelling the remaining legs Southeast Asian meetings in Brunei.

His four nation Asian tour is being looked forward to in the region

key economic partner and is part of looked forward to in the region

priorities in the region. His visit America's initiative. The south—east

priorities in the region. His visit Asian treaty allies. Thank you very

much. The fallout from the shutdown could have an impact on the price of

food on your breakfast table. That is because it is unlikely the US

Department of agriculture will be estimates. Farmers and traders

around the world rely on this date, which can cause huge swings in the

price of corn, wheat, soya beans, and many other commodities. A Europe

business correspondent has the America has planted, but with no

official figures know people quite know how much it has wreaked. As the

world's largest grain exporter, America's actual crop yields matter.

Feeding into what we all pay for exporter. Without all the state

only have recent history to go on. When it comes to the breakfast table

it is cereals which have seen some of the biggest price cuts. Take

it is cereals which have seen some week for example, it is 60% cheaper

than it was one year ago. The story is different for meat. Frozen orange

concentrate is 11% more expensive. The commodity markets may be unsure

of the 2013 harvest has proved as good as many hoped. There are some

concerns about soya bean yields good as many hoped. There are some

little August rain on the corn belt. There is exported data, there's

are surveys going out and checking There is exported data, there's

are surveys going out and checking the yields and measuring heights. It

some traders might see this as an the yields and measuring heights. It

some traders might see this as an opportunity to trade on preferential

information. There could be some traders who have access to deep

knowledge on the markets. They may take advantage of that at a time

when the rest of the world's does not have access to this because

the downing of the USDA. The size of the crop in the US also shapes

the downing of the USDA. The size of Britain's aviation regulator will

rule on how Europe's busiest port can charge airlines in learning

fees. The Civil Aviation Authority is the industry watchdog which

average, 200,000 passengers fly is the industry watchdog which

and out Heathrow every day. The charges passed on as a service fee.

It is capped at $50 for shortfall —— shorthaul flights. What is the

likely outcome and what will it shorthaul flights. What is the

for travellers? I have said that it is three times more than other

airports charge. How have they gotten away with it? Heathrow, as

interest, is a different airport to anywhere else on the planet. London

is the world capital of aviation. The problem with Heathrow is that

because it is effectively full there The problem with Heathrow is that

because it is effectively full there are lots in essence. The actual

market would say that we judge people may be $100 per passenger,

which would be excessive. Therefore the regulator controls what Heathrow

may charge. At the way that is the regulator controls what Heathrow

may charge. At the way that is worked out is arcane. It is not

may charge. At the way that is do with the actual marginal cost of

bit strong. They have allowed above agreement? I think that would be a

bit strong. They have allowed above at it is to say that from a flight

pay $65 as your passenger service from Heathrow to Los Vegas you would

pay $65 as your passenger service fee, that goes to the airport. If

The airlines are furious at the regulators get it right? Indications

are that they will allow only below inflation increases. The airports is

that if they cannot get the fees that they need then the investors

will put their money elsewhere and Heathrow will not get the necessary

upgrades it needs. It is basically a shoehorned into the 21st century.

background of London being starved of runways. Nothing you since the

Second World War. That is a big of runways. Nothing you since the

we will no doubt be talking about soon. Thank you very much. We will

keep you up—to—date on that story. Before I go, a quick flash of the

We have been talking about the fact that these markets so far have maybe

been a bit calm and muted. Not reacting aggressively to what has

been going on. That could change soon. We will discuss that shortly

by me look at the newspapers. The main markets are down just lightly.