:00:00. > :00:22.The Bank of England weighs up action as the economy teeters
:00:23. > :00:32.A move on interest rates today would be the first cut -
:00:33. > :00:45.is Rio 2016 an event that will pay off for its corporate sponsors?
:00:46. > :00:58.Welcome to World Business Report, I'm Aaron Heslehurst.
:00:59. > :01:04.I hope this is an exciting snapshot into the world of business.
:01:05. > :01:07.We'll be going live to Shanghai to talk about that sponsorship issue
:01:08. > :01:15.We start in the City of London where in a few hours' time the Bank
:01:16. > :01:18.of England is widely expected to take action to boost the UK
:01:19. > :01:24.economy - following the vote to leave the European Union.
:01:25. > :01:26.Remember, straight after the referendum in June,
:01:27. > :01:28.Bank chief Mark Carney said that action would likely be needed
:01:29. > :01:35.The Bank surprised the markets by holding off last month.
:01:36. > :01:38.But a string of very weak economic data in recent days
:01:39. > :01:40.has led some experts to say an interest rate cut today
:01:41. > :01:44.Interest rates are already at a record low of 0.5% -
:01:45. > :01:52.as you can see they have been there for eight years.
:01:53. > :01:56.The last time they went up was in 2007.
:01:57. > :02:01.Today they could be cut further - to 0.25%.
:02:02. > :02:05.Leading economists now fear that there's a 50/50 chance of the UK
:02:06. > :02:09.falling into recession as a result of the Brexit vote and lower rates
:02:10. > :02:14.are one of the ways to reduce that risk.
:02:15. > :02:19.The theory goes that lower rates make saving money less attractive
:02:20. > :02:22.while reducing the cost of borrowing.
:02:23. > :02:26.This in turn drives people to borrow and spend more,
:02:27. > :02:29.and encourages firms to invest - all of which should
:02:30. > :02:35.That all sounds great but unfortunately there are also
:02:36. > :02:40.With rates already so low there are fewer levers to pull
:02:41. > :02:47.Japan and the EU have both tried negative rates -
:02:48. > :02:49.effectively charging people to deposit money.
:02:50. > :02:53.But many economists argue that this has done more harm than good.
:02:54. > :03:00.Prolonged ultra-low rates also tend to encourage unsustainable debt
:03:01. > :03:07.With borrowing so cheap - people and businesses are far more
:03:08. > :03:15.likely to pay over the odds for things they can't really afford.
:03:16. > :03:29.Many experts think we will see a car of .25% maybe more action to come. I
:03:30. > :03:34.think that is mainly more of a signal to markets that they are
:03:35. > :03:40.there. It is more of a case of what happens after that. Do we see more
:03:41. > :03:44.credit lending to businesses. Do we see more plans to back loan small to
:03:45. > :03:46.medium enterprises. James Hughes is Chief market analyst
:03:47. > :04:02.at the brokerage GKFX A quarter point is what people are
:04:03. > :04:08.expecting but will it make any difference? Probably not. It is for
:04:09. > :04:14.the markets and for the markets to say, sorry fall last month, we built
:04:15. > :04:22.you up and let you down. They need to do something if just to keep the
:04:23. > :04:26.market more stable. And the reason they would do something is some of
:04:27. > :04:33.the numbers that are out, manufacturing, and GDP... We had
:04:34. > :04:39.numbers at this week showing how the economy has not been doing that well
:04:40. > :04:44.but the point is we just had more data now. We still do not have a lot
:04:45. > :04:50.of data but we have something and it is pointing to the fact that we need
:04:51. > :04:55.to do something, the Bank of England need to act in some way. A cut in
:04:56. > :05:03.interest rates would push the pound lower? It would. It is positive news
:05:04. > :05:08.in terms of equity markets that negative for our currency. It has
:05:09. > :05:17.been a little bit more negative anyway so a little bit more downside
:05:18. > :05:22.is not too bad. The move by the central bank will mirror, if you
:05:23. > :05:27.will, the global picture out there because in the past week, we have
:05:28. > :05:35.seen action by the Aussies and the bank of Japan? They are both keen to
:05:36. > :05:42.drag the rate further, especially in Australia. Negative is not
:05:43. > :05:47.necessarily a bad thing. I think these rates are here for quite a
:05:48. > :05:50.long time. James, great stuff. You will come back and look through the
:05:51. > :05:54.papers with us later. We are also talking sponsorship
:05:55. > :05:56.ahead of the Rio Olympics Some $2 billion have been committed
:05:57. > :06:00.to the games by corporate sponsors - But the list of negative
:06:01. > :06:06.associations seems to grow Brazil is in the midst
:06:07. > :06:11.of a political and economic crisis, with many Brazilians criticising
:06:12. > :06:15.a perceived lack of inclusivity and the use of scarce
:06:16. > :06:18.public resources. Then there are concerns over
:06:19. > :06:24.pollution and the Zika virus. Not to mention the growing doping
:06:25. > :06:28.scandal overshadowing sport. All of which threaten to make
:06:29. > :06:31.the games a questionable investment Vladimir Djurovic, is CEO
:06:32. > :07:00.of Labbrand -a branding consultancy. Halo two years. Good morning. The
:07:01. > :07:08.brand itself, rio 2016, is it to fire damage now? Yes, actually, we
:07:09. > :07:20.have been following the Olympic ran, especially after the Beijing
:07:21. > :07:28.addition and definitely -- edition. There is a lot going on in Brazil,
:07:29. > :07:35.from the Zika academic, delayed deliveries of facilities and so on.
:07:36. > :07:39.This is only one of the issues that the Olympics are facing because also
:07:40. > :07:46.in terms of sponsorship, there has been raised concern about the
:07:47. > :07:55.exclusion of some brands, according to the famous Article 40. There are
:07:56. > :08:02.some things also out of Brazil's control. Let's talk about the doping
:08:03. > :08:08.scandal. I would imagine that has tarnished sport so you would have to
:08:09. > :08:16.be corporate looking at it and say we do not want to be associated with
:08:17. > :08:24.that. I think the Olympic brand is a much more diverse organisation, in
:08:25. > :08:31.terms of customers and viewers minds. Definitely, there are
:08:32. > :08:40.concerns around the Olympics at the moment but, even for the brands
:08:41. > :08:48.using the Olympics as a sponsorship platform, there are ways to go, to
:08:49. > :08:54.use the example of the outlets more thoroughly but those type of
:08:55. > :09:00.figures, instead of maybe images of Rio de Janeiro which may be having
:09:01. > :09:08.some issues with the facilities, unrest in the street... So the row
:09:09. > :09:16.was for the brand to still benefit. -- there are ways. Thank you for
:09:17. > :09:18.joining us from Shanghai. Good on you.
:09:19. > :09:26.Electric car maker Tesla lost $293m in the three months to June.
:09:27. > :09:33.That's the thirteenth quarterly loss in a row.
:09:34. > :09:37.It also missed analyst's sales forecasts and fell short
:09:38. > :09:42.Tesla delivered 14,402 cars during the quarter -
:09:43. > :09:49.The company though insists it is on track to deliver 50,000
:09:50. > :09:54.Model S and Model X vehicles in the second half of the year.