07/07/2016 World Business Report

Now for the latest financial news with Aaron and World Business

Sterling plunges to its lowest since 1985 as those Brexit

Plus, braced for Brexit over the border: Why businesses

We start of course with the ongoing impact of Britain's vote to leave

The pound has been, well, pounded by investors amid growing

concern that the vote for Brexit is hurting confidence

Not to mention a major hint from the Bank of England that

interest rates could be cut as early as this month.

At one point the pound dipped below $1.28.

That's a new 31-year low, in other words it's the first time

Back when hits from Madonna and Phil Collins topped

So I am told by my producer - I am too young to remember

If you start by taking a look at the chart,

the pound plunged on referendum night but has continued to fall ever

since, it's now down some 14% since June 23rd.

It's good news for many FTSE 100 companies who make around three

quarters of their profits outside the UK, so they'll see earnings

That helps explain why the FTSE has been so strong since the referendum.

It's also good news for UK exporters because it means that their products

become cheaper for foreign customers to buy.

But it also means that imports have become more expensive,

leading to price rises on everything from food to TVs.

And the biggest issue, it has further dented investor

confidence in the UK, which has now lost its last

Experts are saying the pound could fall a lot further.

England is small relative to the EU and we don't know what kinds

But here is what we do know: They can't be all that good

because the rest of the European Union has

to self-preserve and they have to make a little bit of an example

out of England so it's probably not a great sign.

And the other truth is that this will probably reveal other

divisions inside British society, and already has.

And so you are going to have a divided country

with unknown leadership going into a period of weakness

in a weak global economy with a lot of negative scrutiny on them

and that is kind of a recipe for a lot of tumult,

turmoil and negative sentiment and we are seeing that price right

Jeremy Cook is Chief Economist at World First foreign exchange.

Good to see you. Thank you for coming in at this hour. We always

talk about the pros and cons of the currency, so, great for our

exporters, hopefully they will sell a lot more. Good for people coming

in, inbound tourism, good for us if we want to go out. But where is the

balance? Is one better than the other? There is still a lot to shake

out over the course of the next few months. We have seen a fall in the

pound that textbooks say is good for exporters. But we saw a fall in the

pound and our export base didn't go very well. There is something called

purchasing power parity, which means it should stabilise, and the pound

is below that at the moment. We are hoping for it to continue further.

We always say against the dollar. But the euro has taken much of a

hit. Are there some people wondering why there are people hammering the

UK at the moment, with this except referendum vote, when you look

across the water at Europe and you have Spain and Portugal, who look

set to become the first ever in the eurozone to be fined because they

are going to break some EU fiscal rules. The Greeks are on their

1,000,000th bailout, with another fifth bailout. They have money they

will never be able to pay back, and yet everyone is saying to the UK it

is better to be with them. European government debt is German or French,

and you have to buy euros to be able to move into that. So that keeps the

euro supported? We have also seen investors move into currencies that

are not under inflationary pressures. Inflation is very low in

the eurozone, in Japan it is up around 20 cents against the pound.

If the EU gets a bit of leadership, could there be a rebound? De. There

will always be a rebound. Let's stay with Brexit

but move to Ireland, after last month's UK vote

to leave the European Union. Ireland's the only EU country

sharing a land border with the UK and the two share deep

economic and trade ties. The BBC's Diarmaid Fleming

visited two companies in Ireland concerned

about what Brexit may mean Sweets being packed in Dublin in the

business typical of Ireland, with close ties to the UK. Sugar, the key

ingredient, is imported from Britain, which is also an important

destination for the produce. A sixth of Ireland's exports go to the UK,

from where a third of their imports come. Part of trade worth over $1

billion a week. The referendum has left anything but a sweet taste for

Irish business, with anxiety and uncertainty over what might be

coming down the line, particularly if trade barriers and tariffs were

to become a reality. The possibility of barriers being put in place, if

and when they do leave, is a worry, big as it will delay all our imports

from the UK and set us back in the marketplace against our competitors,

who will be UK based and flooding the market here. I am standing right

on the border between Northern Ireland and the Republic of Ireland.

The only thing that will tell you that you are moving from one to the

other is a roadside here. One of the biggest fears people have about

Brexit in this part of Ireland is the impact it might have on border

controls. Political peace in Northern Ireland has brought a big

business dividend to the border region, an area once blighted by

violence. With its headquarters just minutes by road inside the Republic,

Ireland's biggest exporter of ducks now sends produce as far away as

China, and many more to the key UK market. They are worried about

weaker sterling making their ducks more expensive, and are even more

worried about the return to a hard border between Northern Ireland and

the republic. Europe has been very good for us in this part of the

world, and to see it now go back we are worried about how it will pan

out. We see it as a backward step and we just hope it doesn't go back

to the bad old days. The scale of uncertainty is being matched. The

low corporation tax rate of 12.5% has been a centre of their strategy

to woo foreign firms. Plans to cut it in the UK means new challenges

for Irish business and close could petition.

Let's go to Asia now where Samsung Electronics

is predicting its best quarterly profits for two years.

It's all down to booming sales of its flagship smartphone,

They sell more of those and they make more money. Absolutely. They

flagged up these better profits that they are due to realise at the end

of the month. It is also due to cost cuts, and the latest model, with the

company forecasting operating profit of $7 million. That is among the

best it has posted for about two years. The South Korean electronics

giant, which happens to be the top-selling handset maker, has a

lion's share of the firm's overall profits. We now know it is being

further squeezed from the iPhone and by Chinese rivals like Huawei. It is

time to break into emerging markets, making a lot of cost cuts, and this

has apparently pushed its sales higher. Good news for Samsung.

We can see the Nikkei is slightly down, and I want to get over to...

Anyway, I will be back