:00:00. > :00:17.Strikes, falling industrial production and the threat
:00:18. > :00:22.of terrorism have all had an effect on the faltering French economy.
:00:23. > :00:24.The last budget before next years election is unveiled today.
:00:25. > :00:34.And as the dust settles on the first presidential debate,
:00:35. > :00:37.what effect is the US election having on the economy of Mexico?
:00:38. > :00:39.The currency, the Peso, has been reacting wildly.
:00:40. > :00:51.The Eurozone's second biggest economy, France,
:00:52. > :00:56.The economy has contracted after being hit by a fall
:00:57. > :00:59.in manufacturing, industrial action and continued fears over security.
:01:00. > :01:06.In a few hours time the finance minister Michel Sapin
:01:07. > :01:10.delivers his last budget before next year's elections.
:01:11. > :01:14.Mr Sapin had promised to improve finances this year and next,
:01:15. > :01:17.while also lowering taxes and boosting growth and cutting
:01:18. > :01:24.unemployment - but has any of that been achieved?
:01:25. > :01:27.France is unlikely to meet its targets for next year
:01:28. > :01:32.of cutting its costs, and spending, to less than 3% of the value
:01:33. > :01:36.of what it produces every year, or its GDP.
:01:37. > :01:40.This is according to France's independent regulator,
:01:41. > :01:47.In a recent report the regulator even claimed the government's
:01:48. > :01:49.forecast of 1.5% economic growth for this year
:01:50. > :01:55.And earlier this week the jobless figures for August rose
:01:56. > :02:06.The biggest jump in the number of unemployed for nearly three years.
:02:07. > :02:10.Laurent Clavel is an economist at AXA Investment Managers in Paris
:02:11. > :02:21.Good morning. It is the tip of the iceberg. I have mentioned only a few
:02:22. > :02:28.issues. When you look at the French economy as it stands, give us your
:02:29. > :02:33.take on Howard is doing. I will need to make a rosier picture on what you
:02:34. > :02:40.are doing. I agree that there are structural issues and we made it
:02:41. > :02:45.back to that later on. The fact is the second quarter contraction of
:02:46. > :02:53.GDP is not really an early sign of a technical recession art, rather, a
:02:54. > :03:01.fairly anticipated I would say drop, after a very sharp increase at the
:03:02. > :03:04.beginning of this year. The growth of 7% quarter to quarter which
:03:05. > :03:13.boosted by temporary factors. We expected the second quarter to be
:03:14. > :03:18.rather low. There is still disappointment but we were expecting
:03:19. > :03:26.it to be lower. The growth forecast that will be released together with
:03:27. > :03:33.the budget for the French economy may be too optimistic at 1.5%. I say
:03:34. > :03:39.that what we expect from next year is a rather a slowdown because of
:03:40. > :03:45.several factors, the drop in oil prices, the euro depreciation and
:03:46. > :03:51.some fiscal measures favouring corporate investment. We expect a
:03:52. > :03:57.slowdown but the forecast we have in mind is not that much lower than the
:03:58. > :04:03.one that the IMF provides and we are discussing a couple of tens of
:04:04. > :04:10.points of growth next year. It is true to say, isn't it, that the
:04:11. > :04:15.Treasurer needs some giveaways in his budget to encourage voters next
:04:16. > :04:21.year. What is he likely to say? On the part you are definitely correct.
:04:22. > :04:28.You cannot square the circle. You cannot have an increase in
:04:29. > :04:35.expenditure, which we expect, in favour of education. 2 billion will
:04:36. > :04:46.go to households which is quite clearly aid gesture of amendment. It
:04:47. > :04:56.is seen by many left-wing voters as going into fiscal austerity. On the
:04:57. > :05:01.top of that you will see another following of corporate. It is
:05:02. > :05:05.balancing what happened in terms of tax increase on corporate tax.
:05:06. > :05:10.Employers contribution, social contribution at beginning of the
:05:11. > :05:15.mandate. Altogether we expect several measures, as you pointed
:05:16. > :05:20.out, Gross is not likely to be extremely strong, between one and
:05:21. > :05:25.1.5% so something will have to give. My guess is that the front figure
:05:26. > :05:31.for the deficit is going to be overly ambitious and there will be
:05:32. > :05:35.some fiscal slippage. I'm sorry we need to leave it there. Thank you
:05:36. > :05:36.for joining us so early this morning.
:05:37. > :05:39.The first televised US presidential debate saw Donald Trump
:05:40. > :05:42.and Hillary Clinton clash over the economy, terrorism and race -
:05:43. > :05:45.and it was watched by millions of people around the world.
:05:46. > :05:48.One nation taking a very keen interest is Mexico -
:05:49. > :05:55.where even the country's currency is being affected
:05:56. > :06:00.by what is happening in the race for the White House.
:06:01. > :06:09.For Mexicans their weekly shop is getting more and more expensive.
:06:10. > :06:13.Since the election of the president four years ago the value of the peso
:06:14. > :06:18.has fallen by a third. It is also impacting shopowners who have to
:06:19. > :06:26.import products. And it is costing the Mexican government its
:06:27. > :06:32.credibility. TRANSLATION: People have seen so much corruption and
:06:33. > :06:37.cynicism that we are no longer putting up with what we did what
:06:38. > :06:46.three years ago. We have run out of patience and every day it gets worse
:06:47. > :06:58.and worse. We do not know when it.. .. Is going to stop. TRANSLATION:
:06:59. > :07:02.People have reined in some of their spending, our wage does not go as
:07:03. > :07:06.far as it used to. We are selling our petrol today and I could by the
:07:07. > :07:13.same stuff cheaper in there than in here. The peso was being compared to
:07:14. > :07:18.a pinata that gets filled with sweets and smashed at parties. It is
:07:19. > :07:23.getting a walloping at the moment. The peso was one of the top ten most
:07:24. > :07:28.traded currencies in the world. It acts as a hedge for other emerging
:07:29. > :07:34.markets so in volatile times it gets old. With concerns about US rate
:07:35. > :07:39.hike and oil markets, it does not help the peso. American politics is
:07:40. > :07:44.also playing a part. When Donald Trump gains in the poll for the peso
:07:45. > :07:49.falls and vice-versa. Look at what happened after this's debate. The
:07:50. > :07:56.peso jumped when markets felt that Hillary Clinton came out on top. But
:07:57. > :08:01.the suggestions of Mr Trump that he would renegotiate Nato and build a
:08:02. > :08:07.wall are damaging. 80% of Mexican exports go to the United States and
:08:08. > :08:15.it is worth about $25 billion a year. The election of Donald Trump
:08:16. > :08:25.could have an impact on the Mexican peso because of the proposals
:08:26. > :08:32.related with NAFTA. Not only that, it has an important impact in
:08:33. > :08:43.Mexican economy. If Donald Trump does not allow immigrants to go to
:08:44. > :08:52.the US, the Mexican economy is going to be very bad. For now, traders
:08:53. > :08:57.need to work and sell harder to make the mass out. Depending on which way
:08:58. > :08:59.the vote goes in November, something for this pinata could turn out to be
:09:00. > :09:01.quite profitable. The World Trade organisation has
:09:02. > :09:04.cut its forecast for global trade growth this year by
:09:05. > :09:18.more than a third. Let's go to Ricoh. Ricoh does this
:09:19. > :09:21.sound good? The world trade organisation currently is blaming
:09:22. > :09:26.the slowdown in countries such as China and Brazil and lower levels of
:09:27. > :09:34.imports into the United States. This new figure of 1.7% is down from the
:09:35. > :09:38.April estimate of 2.8%. That is one third of a percent down and this
:09:39. > :09:43.would be the slowest space of trade and output since the 2009 financial
:09:44. > :09:46.crisis. It is also the first time in 15 years that international commerce
:09:47. > :09:50.has been left trailing behind the global economy. You have the
:09:51. > :09:55.director general speaking up saying that the dramatic slowing of trade
:09:56. > :09:59.growth is serious and should serve as a wake-up call. He stressed that
:10:00. > :10:03.it is particularly concerning in the context of growing anti-
:10:04. > :10:07.globalisation and creeping protectionism. This is, indeed,
:10:08. > :10:11.insights that governments and several banks will need to look at
:10:12. > :10:17.thoroughly as they fix their economic policies going forward.
:10:18. > :10:24.That's all from me. I will see you soon.
:10:25. > :10:29.Plans to restrict the use of bail for suspects in England and Wales
:10:30. > :10:33.who haven't been charged have been criticised by the organisation