:00:00. > :00:00.Now for the latest financial news with Aaron and World Business
:00:00. > :00:19.Sterling plunges to its lowest since 1985 as those Brexit
:00:20. > :00:28.Plus, braced for Brexit over the border: Why businesses
:00:29. > :00:58.We start of course with the ongoing impact of Britain's vote to leave
:00:59. > :01:04.The pound has been, well, pounded by investors amid growing
:01:05. > :01:06.concern that the vote for Brexit is hurting confidence
:01:07. > :01:15.Not to mention a major hint from the Bank of England that
:01:16. > :01:19.interest rates could be cut as early as this month.
:01:20. > :01:25.At one point the pound dipped below $1.28.
:01:26. > :01:28.That's a new 31-year low, in other words it's the first time
:01:29. > :01:33.Back when hits from Madonna and Phil Collins topped
:01:34. > :01:40.So I am told by my producer - I am too young to remember
:01:41. > :01:51.If you start by taking a look at the chart,
:01:52. > :01:54.the pound plunged on referendum night but has continued to fall ever
:01:55. > :01:56.since, it's now down some 14% since June 23rd.
:01:57. > :01:59.It's good news for many FTSE 100 companies who make around three
:02:00. > :02:02.quarters of their profits outside the UK, so they'll see earnings
:02:03. > :02:11.That helps explain why the FTSE has been so strong since the referendum.
:02:12. > :02:14.It's also good news for UK exporters because it means that their products
:02:15. > :02:17.become cheaper for foreign customers to buy.
:02:18. > :02:26.But it also means that imports have become more expensive,
:02:27. > :02:46.leading to price rises on everything from food to TVs.
:02:47. > :02:52.And the biggest issue, it has further dented investor
:02:53. > :02:55.confidence in the UK, which has now lost its last
:02:56. > :03:10.Experts are saying the pound could fall a lot further.
:03:11. > :03:13.England is small relative to the EU and we don't know what kinds
:03:14. > :03:18.But here is what we do know: They can't be all that good
:03:19. > :03:20.because the rest of the European Union has
:03:21. > :03:24.to self-preserve and they have to make a little bit of an example
:03:25. > :03:26.out of England so it's probably not a great sign.
:03:27. > :03:29.And the other truth is that this will probably reveal other
:03:30. > :03:31.divisions inside British society, and already has.
:03:32. > :03:33.And so you are going to have a divided country
:03:34. > :03:35.with unknown leadership going into a period of weakness
:03:36. > :03:39.in a weak global economy with a lot of negative scrutiny on them
:03:40. > :03:42.and that is kind of a recipe for a lot of tumult,
:03:43. > :03:44.turmoil and negative sentiment and we are seeing that price right
:03:45. > :03:53.Jeremy Cook is Chief Economist at World First foreign exchange.
:03:54. > :04:05.Good to see you. Thank you for coming in at this hour. We always
:04:06. > :04:10.talk about the pros and cons of the currency, so, great for our
:04:11. > :04:16.exporters, hopefully they will sell a lot more. Good for people coming
:04:17. > :04:21.in, inbound tourism, good for us if we want to go out. But where is the
:04:22. > :04:26.balance? Is one better than the other? There is still a lot to shake
:04:27. > :04:31.out over the course of the next few months. We have seen a fall in the
:04:32. > :04:37.pound that textbooks say is good for exporters. But we saw a fall in the
:04:38. > :04:52.pound and our export base didn't go very well. There is something called
:04:53. > :04:55.purchasing power parity, which means it should stabilise, and the pound
:04:56. > :05:01.is below that at the moment. We are hoping for it to continue further.
:05:02. > :05:05.We always say against the dollar. But the euro has taken much of a
:05:06. > :05:12.hit. Are there some people wondering why there are people hammering the
:05:13. > :05:17.UK at the moment, with this except referendum vote, when you look
:05:18. > :05:21.across the water at Europe and you have Spain and Portugal, who look
:05:22. > :05:25.set to become the first ever in the eurozone to be fined because they
:05:26. > :05:32.are going to break some EU fiscal rules. The Greeks are on their
:05:33. > :05:35.1,000,000th bailout, with another fifth bailout. They have money they
:05:36. > :05:45.will never be able to pay back, and yet everyone is saying to the UK it
:05:46. > :05:52.is better to be with them. European government debt is German or French,
:05:53. > :06:01.and you have to buy euros to be able to move into that. So that keeps the
:06:02. > :06:04.euro supported? We have also seen investors move into currencies that
:06:05. > :06:09.are not under inflationary pressures. Inflation is very low in
:06:10. > :06:16.the eurozone, in Japan it is up around 20 cents against the pound.
:06:17. > :06:27.If the EU gets a bit of leadership, could there be a rebound? De. There
:06:28. > :06:30.will always be a rebound. Let's stay with Brexit
:06:31. > :06:32.but move to Ireland, after last month's UK vote
:06:33. > :06:35.to leave the European Union. Ireland's the only EU country
:06:36. > :06:38.sharing a land border with the UK and the two share deep
:06:39. > :06:41.economic and trade ties. The BBC's Diarmaid Fleming
:06:42. > :06:42.visited two companies in Ireland concerned
:06:43. > :06:59.about what Brexit may mean Sweets being packed in Dublin in the
:07:00. > :07:04.business typical of Ireland, with close ties to the UK. Sugar, the key
:07:05. > :07:09.ingredient, is imported from Britain, which is also an important
:07:10. > :07:12.destination for the produce. A sixth of Ireland's exports go to the UK,
:07:13. > :07:18.from where a third of their imports come. Part of trade worth over $1
:07:19. > :07:23.billion a week. The referendum has left anything but a sweet taste for
:07:24. > :07:25.Irish business, with anxiety and uncertainty over what might be
:07:26. > :07:31.coming down the line, particularly if trade barriers and tariffs were
:07:32. > :07:36.to become a reality. The possibility of barriers being put in place, if
:07:37. > :07:42.and when they do leave, is a worry, big as it will delay all our imports
:07:43. > :07:47.from the UK and set us back in the marketplace against our competitors,
:07:48. > :07:52.who will be UK based and flooding the market here. I am standing right
:07:53. > :07:55.on the border between Northern Ireland and the Republic of Ireland.
:07:56. > :07:59.The only thing that will tell you that you are moving from one to the
:08:00. > :08:03.other is a roadside here. One of the biggest fears people have about
:08:04. > :08:08.Brexit in this part of Ireland is the impact it might have on border
:08:09. > :08:14.controls. Political peace in Northern Ireland has brought a big
:08:15. > :08:17.business dividend to the border region, an area once blighted by
:08:18. > :08:22.violence. With its headquarters just minutes by road inside the Republic,
:08:23. > :08:28.Ireland's biggest exporter of ducks now sends produce as far away as
:08:29. > :08:33.China, and many more to the key UK market. They are worried about
:08:34. > :08:38.weaker sterling making their ducks more expensive, and are even more
:08:39. > :08:43.worried about the return to a hard border between Northern Ireland and
:08:44. > :08:48.the republic. Europe has been very good for us in this part of the
:08:49. > :08:53.world, and to see it now go back we are worried about how it will pan
:08:54. > :08:59.out. We see it as a backward step and we just hope it doesn't go back
:09:00. > :09:05.to the bad old days. The scale of uncertainty is being matched. The
:09:06. > :09:11.low corporation tax rate of 12.5% has been a centre of their strategy
:09:12. > :09:15.to woo foreign firms. Plans to cut it in the UK means new challenges
:09:16. > :09:18.for Irish business and close could petition.
:09:19. > :09:20.Let's go to Asia now where Samsung Electronics
:09:21. > :09:22.is predicting its best quarterly profits for two years.
:09:23. > :09:24.It's all down to booming sales of its flagship smartphone,
:09:25. > :09:36.They sell more of those and they make more money. Absolutely. They
:09:37. > :09:39.flagged up these better profits that they are due to realise at the end
:09:40. > :09:47.of the month. It is also due to cost cuts, and the latest model, with the
:09:48. > :09:52.company forecasting operating profit of $7 million. That is among the
:09:53. > :09:56.best it has posted for about two years. The South Korean electronics
:09:57. > :10:01.giant, which happens to be the top-selling handset maker, has a
:10:02. > :10:09.lion's share of the firm's overall profits. We now know it is being
:10:10. > :10:14.further squeezed from the iPhone and by Chinese rivals like Huawei. It is
:10:15. > :10:18.time to break into emerging markets, making a lot of cost cuts, and this
:10:19. > :10:27.has apparently pushed its sales higher. Good news for Samsung.
:10:28. > :10:33.We can see the Nikkei is slightly down, and I want to get over to...
:10:34. > :10:35.Anyway, I will be back