13/10/2016 World Business Report

Now for the latest financial news with Sally and World Business

Brexit breather for sterling - the pound regains some ground

after the UK government agrees Parliament should

Plus, Marmite wars - Tesco pulls dozens of household

brands off its website in a pricing battle with supplier Unilever.

Also in the programme: China sees a big fall in exports hitting market

We start with the impact of Brexit on financial markets

because there has been some relief for the battered pound.

It had its biggest jump against the dollar in a month

after Prime Minister Theresa May suggested she would give Parliament

a say in plans to leave the European Union.

That has eased some of the fears of a hard line approach to the talks

which could see the UK leave the EU single market.

According to calculations by the UK treasury,

leaving the EU single market, a so called hard Brexit,

could cost it as much as ?66 billion each year,

It says Britain's economy, its annual output or GDP,

could be up to 9.5% smaller within 15 years if it can't strike

a deal giving access to the EU market,

and is forced to operate under World Trade Organisation rules.

These figures are disputed by Brexit supporters.

But what can't be disputed is what's happened to the pound.

It has lost 18% of its value since the Brexit vote,

The FTSE 100 though has been hitting record levels.

That's because many of its companies generate big profits overseas,

which are worth more when they're converted to the weaker sterling.

But the UK consumer is already feeling the effects.

Tesco has withdrawn some of the most popular brands from its website,

including Marmite spread, Vienetta ice cream and Persil

washing powder - after Unilever tried to put up prices to compensate

Our Business Editor Simon Jack reports.

Out of stock, Marmite, Ben Jerry's ice cream, Persil, withdrawn from

the website as the biggest retailer in the UK would not accept a 10%

price increase from Unilever. Retailers and suppliers fall out all

the time but industry sources say this is of a different magnitude.

The biggest retailer in the country to fall out with its biggest

supplier Marks a new front in a perennial prize for some say has

escalated because of Brexit. This is Unilever's justification for the

higher bill. The value of sterling has fallen 17% since the Brexit

which means Dutch company Unilever is seeing a fall in prices, so they

are upping the price to compensate. We have seen the pound fall as a

result of the Brexit vote and obviously as food products are

imported this is putting pressure on suppliers and eventually something

will have to give. We eventually may see some of the cost increases

coming through to actual prices on supermarket shelves which would be

bad for the everyday average British consumer. It was just last week that

the boss of Tesco told the BBC that price pressures were building. There

are some pressures. Commodity prices, exchange rates will bring

pressure to the marketplace and historically that has seen prices

rise but I stress the approach at Tesco is to work with suppliers to

try to offset those pressures through productivity and other

things so that prices don't rise. That working together at is to have

stopped working. In a statement Tesco hoped the dispute would be

resolved soon but until then shoppers may find some items on

their shopping list missing. Jeremy Cook is chief economist

at foreign exchange firm World It is nice to see you again, Jeremy.

Simon's story illustrates the effect on the real economy of all of this.

Absolutely. The next question people are asking is just how much prices

will increase as a result of this. The UK... It may have been part of

the EU it still is, but it is an island nation, we import a lot of

the food we consume, fuel, cars and houses consumed to run and heat, so

how much as a result of the devaluation of the pound will we be

paying more in the next coming years" and this situation, that is,

the pound is sensitive to every bit of news about Brexit will carry on

presumably until March 2017. That is when we are supposedly exiting.

Yeah, the initial falls have been on the back of the fact that we were

not getting... And these were not going to get a vote, MPs are likely

to a debate gave it a little boost, but the fact is that unless we can

see a clear plan from the UK government about how they expect to

attack the negotiations with the EU than all the rumour, speculation and

intrigue, any leaks from either the UK government or the EU government

are going to send it into a volatile frenzy. It's interesting as well

because it's not just about exit but it's also about what's happening

elsewhere, so in the US it will be impacted ivy -- by the election, and

the effect on the euro, but the difficulty with the dollar will

likely remain strong because it is seen as one of the safest havens in

the world, isn't it, US Treasuries? Currency markets and political risk

are always uneasy bedfellows and as we saw with Brexit this year... The

trump that possibility at the presidency, we think it could lead

to a fair bout of US dollar strength -- Trump possibility. Everyone looks

to the US as a safe haven when things get crazy in markets and

there would be nothing more crazy than a Trump residency, so that

could keep the sterling dollar below the 20% level once again. In the

meantime, prices of things in the UK will be going up, won't they? Yes.

Inflation will be a problem. We saw it at the petrol pump, we are seeing

it with imported flour, which goes into bread, milk, eggs, the basics

you rely on, they will get more expensive. Brexit makes households

poorer. So we need to stockpile Marmite. Anything from Unilever. I

never thought I would see the day. Jeremy, thank you very much indeed

for coming in. Let's turn to Asia now where markets

are being hit by news of a slump Riuco Hizon is following this

for us in Singapore Now, Rico .org Sally, I still want

my Marmite. All the news has been fairly positive. This is a surprise,

isn't it? Absolutely. You have Japanese stocks reversing early

gains like other Asian stock markets as exporters were hit by a rush into

the Japanese yen as the mainland released worse report fuelling

worries about the second largest economy. Exports plummeting 10%

year-on-year and imports falling around 2% due to an mean it global

and domestic demand both exports and imports missing expectations --

anaemic. This comes after the Chinese currency weakening towards

the end of September. Over the last week it has touched its lowest

levels against the dollar in six years, so markets here have been

affected from Hong Kong to South Korea to Singapore as China is

indeed very crucial to the global economy and its performance

affecting trading partners. When you talk to some analysts they are not

certain if this week trading figure is a signal for slower economic

growth going forward, and others say that despite the poor data is they

see confidence improving as the economy stabilises and emperors.

Thank you very much indeed, Rico, and in a few minutes we will show

you the impact it is having on market - we will show you the

numbers. In other news: John Stumpf,

the boss of US banking giant Wells Fargo, is to resign

immediately in the wake of a scandal The bank is investigating how two

million accounts were opened without customers' permission

to boost sales figures. Last month Wells Fargo was fined

$185 million and accused of "widespread

illegal practice" by US regulators. Mr Stumpf will be succeeded

by the bank's current president and chief operating

officer Timothy Sloan. So, let's look at markets, and as

Rico mentioned Chinese news hitting sentiment especially for Hong Kong

with shares in hanging high -- Shanghai lower as well. The yen is

weakening a bit. Just to mention markets also moved by the Fed

minutes released in the US showing the Federal Open Market Committee

voted 7-3 to leave interest rates unchanged at the last meeting but

could they be going up in December? That's all from me for now. See you