:00:00. > :00:00.nation's fallen, veteran soldiers and those still serving. Those are
:00:00. > :00:18.the latest headlines from BBC World News. Now for the latest financial
:00:19. > :00:21.news with World Business Report. Looking for the road to recovery `
:00:22. > :00:26.can a Chinese bail out save France's struggling Peugeot` Citroen?
:00:27. > :00:42.Goodbye, low`cost China. Hello, affordable America. We look at the
:00:43. > :00:50.changing map of global competitiveness. Welcome to World
:00:51. > :00:55.Business Report. A big boost for Japan in its battle against
:00:56. > :00:58.inflation, but first, we start with French car giant Peugeot, otherwise
:00:59. > :01:08.known as PSA Peugeot`Citroen. These are critical times for Europe's
:01:09. > :01:11.second biggest car maker. Over the past two years it has lost over $10
:01:12. > :01:14.billion, forcing it to seek a bail out from a Chinese partner earlier
:01:15. > :01:18.this year. Later this morning, we will find out whether the company is
:01:19. > :01:21.managing to stem the losses when it releases results for the first three
:01:22. > :01:29.months of the year. Jeremy Howell reports. Following Volvo and Saab,
:01:30. > :01:33.Peugeot`Citroen is the latest to collapse into the arms of a Chinese
:01:34. > :01:43.rescuer. Last month, the company raised $2 million to keep itself in
:01:44. > :01:46.business by selling stocks to the Dongfeng group and the French
:01:47. > :01:52.government. The new chief executive plans to cut the number of models
:01:53. > :01:56.the group makes from 45 to 26. The DS range will be developed so it can
:01:57. > :02:01.compete more strongly in the luxury car sector against the likes of BMW
:02:02. > :02:08.and Mercedes`Benz. The aim is that in two years, the group will be
:02:09. > :02:13.running at a profit again. They have set themselves a target of a 2%
:02:14. > :02:17.operating margin. That seems to be a realisation that they will lose
:02:18. > :02:22.money in the bad years but made a small profit in the good years. It
:02:23. > :02:25.is not ambitious enough. There is a problem with moving up market
:02:26. > :02:30.because it costs a lot of money and is not always successful.
:02:31. > :02:36.Peugeot`Citroen sells 60% of its cars in Europe but demand has
:02:37. > :02:39.slumped since 2008. Forced to cut supply, the company has closed its
:02:40. > :02:46.plant near Paris in the face of union opposition. But in the past
:02:47. > :02:52.three months, Peugeot`Citroen 's European sales have by over 20 ``
:02:53. > :02:57.over 10%. Does that mean the bad times are over? That would be a
:02:58. > :03:01.mistake. Some companies act as though the problems will go away but
:03:02. > :03:05.the forecasters are aiming for very modest growth throughout the EU.
:03:06. > :03:06.Some markets are doing better than others and some are still struggling
:03:07. > :03:43.big changes in the global economy very badly.
:03:44. > :03:49.big changes in the global economy over the past decade. Let's take a
:03:50. > :04:00.look at some of the winners and losers. The US has seen a plunge in
:04:01. > :04:06.energy costs thanks to the boom in shale gas, while wages have remained
:04:07. > :04:09.stable. Meanwhile, China is among those that have seen big increases
:04:10. > :04:13.in wages. Its cost advantage over the US has been eroded to just 5%.
:04:14. > :04:18.Brazil is now more expensive to manufacture in than most of Western
:04:19. > :04:23.Europe. The UK has been one of the big winners. It now has the lowest
:04:24. > :04:26.manufacturing costs in Western Europe. That's largely down to wages
:04:27. > :04:43.remaining steady and workers becoming more productive. Thank you
:04:44. > :04:49.for joining us. Tell us some of the major findings of this report. The
:04:50. > :04:55.main finding is that low`cost countries are not always low`cost
:04:56. > :04:58.and fundamentally, countries in Western Europe and the US, which
:04:59. > :05:02.have always been viewed as high cost, many of them are starting to
:05:03. > :05:08.become low`cost and very competitive. The world is changing
:05:09. > :05:14.very fast. I listed some examples of that earlier. The top 25 export
:05:15. > :05:21.economies were examined in terms of how they each stack up. Tell us
:05:22. > :05:24.about that. Some of those economies are under pressure. Countries like
:05:25. > :05:29.Russia and Brazil, as you mentioned earlier, are under a lot of
:05:30. > :05:36.pressure, facing very significant cost pressures. There are other
:05:37. > :05:42.countries that are losing ground. Much of Western Europe including
:05:43. > :05:48.Sweden and Belgium and France. They are becoming uncompetitive. There is
:05:49. > :05:51.one group of countries that is basically holding steady. The UK and
:05:52. > :05:56.the Netherlands are included in that, and so are India and
:05:57. > :06:03.Indonesia. The US and Mexico are the rising stars. We are seeing a very
:06:04. > :06:06.big seachange in economics. When we look at some of the criteria you
:06:07. > :06:11.used to measure the competitiveness of these different economies, we are
:06:12. > :06:17.looking at labour costs, wages, energy costs. What has fracking done
:06:18. > :06:24.to the cost of gas in the US? Currency fluctuations... What are
:06:25. > :06:28.some of these criteria? There are four main factors when you look at
:06:29. > :06:37.it from a large`scale perspective. Productivity, wages, exchange rates
:06:38. > :06:40.and energy costs. Right now, the US is seeing favourable results on all
:06:41. > :06:48.four of those. And in other countries, there have been some
:06:49. > :06:56.shifts and this is having a" trade. This will continue over the next
:06:57. > :07:04.five years. `` this is having a big impact in global trade. Were there
:07:05. > :07:07.many surprises in your research? Most people would believe that
:07:08. > :07:12.Brazil is a low`cost country but it was one of the highest cost
:07:13. > :07:15.countries in our study. At the same time, people would have said that
:07:16. > :07:21.the UK is very high cost, but relative to the rest of Western
:07:22. > :07:23.Europe, the UK is leading in terms of being the lowest cost Western
:07:24. > :07:35.European country overall. Fascinating. Redrawing how we view
:07:36. > :07:44.the competitiveness of different countries around the world.
:07:45. > :07:48.Good news from Japan in its battle to end more than ten years of
:07:49. > :07:52.deflation. Consumer prices in Tokyo rose at their fastest pace in 22
:07:53. > :08:02.years in April, according to early data. Good to see you. Talk me
:08:03. > :08:10.through what is going on here. Well, it is all to do with the sales
:08:11. > :08:15.tax rise, the consumption tax. From the 1st of April this year, that
:08:16. > :08:21.rate went up from 5% to 8%, pushing up consumer prices. I spoke with
:08:22. > :08:24.analysts earlier and they say that the data suggests companies have
:08:25. > :08:28.passed all of that increase on to the consumers and that is not a bad
:08:29. > :08:32.thing because it sends out a very clear message to Japanese consumers
:08:33. > :08:38.that prices are starting to rise in the country. Unlike other countries,
:08:39. > :08:42.Japan has been fighting deflation, falling consumer prices, for the
:08:43. > :08:46.best part of the last 20 years. What that has done is hurt domestic
:08:47. > :08:50.consumption, as consumers and businesses tend to put off purchases
:08:51. > :08:54.in the hope of getting a cheaper and better deal later. Japanese
:08:55. > :08:59.policymakers have been very keen to end that trend and have been pushing
:09:00. > :09:03.for consumer prices to rise in the hope that such a move will let
:09:04. > :09:06.consumers and businesses start spending more money. On that front,
:09:07. > :09:17.these numbers are definitely encouraging. Thank you.
:09:18. > :09:20.Microsoft's new boss Satya Nadella got off to a good start with Wall
:09:21. > :09:23.Street after the software giant reported much better than expected
:09:24. > :09:26.quarterly profits after the closing bell ` the first results since he
:09:27. > :09:29.took charge. Mr Nadella is trying to refocus the company towards mobile
:09:30. > :09:41.and cloud computing amid a slump in PC sales. Online retailer Amazon
:09:42. > :09:44.also reported revenue ahead of Wall Street expectations ` up 23% to
:09:45. > :09:47.$19.7 billion in the first three months of the year. It's seeing
:09:48. > :09:49.sales growth slow, though, and faces rising competition abroad from
:09:50. > :10:05.rivals like China's Alibaba, which is preparing for a massive stock
:10:06. > :10:23.market flotation soon. Exciting times in the technology sector.
:10:24. > :10:26.That's it from me. Goodbye. A collection of street art by the
:10:27. > :10:30.anonymous graffiti artist Banksy is due to be auctioned after being
:10:31. > :10:34.removed from walls around Britain. The works are expected to fetch
:10:35. > :10:35.millions but Banksy himself claims it is going ahead without his