15/12/2016 World Business Report

to seize the house where Adolf Hitler was born.

This follows the repeated refusal of its owner to sell the building

Now for the latest financial news with Sally Bundock

The Fed hikes interest rates, and signals they will rise

Are we seeing the first effects of Trumponomics?

Plus, London's loss could be New York's gain.

A House of Lords committee warns against pushing the City off

We will show you all the market numbers very soon. I have to say

that most of them are headed south. We will start with the reason why.

We start with US interest rates, because America's Central Bank,

the Federal Reserve, has raised the cost of borrowing.

Nearly everyone predicted that would happen.

What wasn't expected was a strong signal they will be going up faster,

and higher, than most have been counting on.

That's rattled stock markets and boosted the dollar.

Higher rates will have a knock-on effect around the world.

And what wasn't said, but was implied, was the role

in all this of the economic plans of President-Elect Trump.

The Fed has raised its main interest rate by a quarter of a percentage

point It's now set at a range of a between 0.5% and 0.75%.

The Fed is now predicting three rate rises next year,

And three more a year for the following two years.

So that borrowing costs will hit 3% by 2019.

Again, that's higher than its previous predictions.

Well, it wasn't spelled out, but there were strong hints it's

His plans for lower taxes and more spending which should boost

His plans for lower taxes and more spending which should boost

From New York, here's Samira Hussain.

This is only the second time America's Central Bank has raised

interest rates since cutting them to almost zero in the depths

A lot has changed in the last decade.

The US labour market is strengthening and inflation

is now inching closer to the Federal Reserve's target rate

This change to monetary policy was expected,

but what everyone wanted to know from the Chair

of the Federal Reserve Janet Yellen, was how changes to America's fiscal

policy may change the Fed's outlook "some of the participants but not

all of the participants did incorporate some assumption

of a change in fiscal policy into their projection.

And that may have been a factors that was one of several that

There was no mention of President-Elect Donald Trump

by name, but the implication was clear.

The plans of the incoming administration are beginning

to influence what the Federal Reserve has forecast

So, let's take a look at how markets are reacting to all of this in Asia.

Talk us through it. Everything is headed south. That is right. Still

in southern territory. Although, a quarter of a percent increase was

expected. Investors were surprised to see the Fed is now projecting not

two, but three, increases for 2017. Japan getting early gains after the

release of upbeat manufacturing numbers. Hong Kong's Hang Seng Index

falling. South Korea and the Shanghai Composite index also in

negative territory. Apart from the US Fed, you also have the Hong Kong

monetary authority immediately following the Fed's lead and raising

the lending by a quarter of a percent. That is because

policymakers in China's financial sector have no choice but to follow

what the Fed does. Also, we are seeing strength in the dollar with

the greenback at a ten month high against the Japanese yen. And the

euro is at its lowest level against the greenback since March, 2015. So,

things are not looking good for Asian currencies as well. Sally

Bundock. Thank you, Rico Hizon. Good to see you.

We are also continuing to follow fierce debate over Britain's

There is a warning this morning from the House of Lords over

the impact of Brexit on the UK's financial industry.

It warns that Britain will need a 'transitional period' once it

leaves the EU, so that financial firms don't face what it calls

a "cliff edge" that pushes them to relocate their business.

If we take a look at some of the details of the report.

It points out that London is the world's top financial centre

employing well over a million people.

A lot of those are foreigners, 60,000 from the EU, 100,000

The industry relies on the ability to access staff with the right

skills and easily transfer them between the UK and EU.

Then there is the key issue of "passporting," the ability

of London-based firms to sell financial services across the EU,

a privilege they might lose after Brexit.

And it says the EU should also think carefully to avoid

EU firms rely on the services provided in the UK, and pain caused

to the UK's financial sector will not benefit the EU,

On Wednesday, one of the people in charge of taking Britain out

of the EU, the Brexit Secretary, David Davis, was facing questions

from members of Parliament about the Government's plans.

The government is now going to publish its plan for the

negotiations before Article 50 is triggered. When can we expect to see

this? As soon as we can, chairman. Once all the research and policy is

complete. And the reason for the setting of the final possible date

of the 31st of March was numerous. But one of those was the idea of

sorting out policy first and consulting properly. So, next month,

January, February? It will not be next month. The policy work is still

under way and there are many decisions still to be made. We have

carried out, well, 57, I think, each which I think has consequences with

parts of the 85% economy. Some of those are still to be done. There is

work still to be done on justice affairs. It will be as soon as we

are ready. That is the UK Brexit Secretary, David Davis. Theresa May,

the Prime Minister, is in Brussels today talking about all of that.

Charles Dumas, Chief Economist at Lombard Street Research.

Good morning. Good morning. Give us your take on this report from the

House of Lords. Is it helpful? It seems to tell us what we already

know. It is helpful because it highlights not much business will be

moved to Paris or Frankfurt. If business moves it will go to New

York. There is actually a general interest in making sure that be very

coherent London scene does not get dismantled. They are pointing out

the various issues at stake which are big issues when you look at the

amount the city of London generates for the UK economy. Do you think

there is an argument for a special deal for the financial sector as

there has been for the car industry? I suppose there has to be one.

Because finance is always mostly related to government. And

government stands behind the financial industry, as we know.

There has to be a special deal in some form or another, and in the

British case, it is important. People will be concerned about it.

Do we have any sense of where the EU is, that is, Michel Barnier and the

others who have been given the job of negotiating with the city of

London? It is not a question of were Michel Barnier is, but also Angela

Merkel. And then you have front in this ring and autumn for Germany. I

don't think any of these negotiations will get serious until

we know who we are dealing with and people don't have to do a electoral

politics any more and can just get on with business and the business of

getting the best possible solution for themselves and for all of us.

OK, we will leave it there, Charles. Thank you very much indeed for your

thoughts and analysis. And there is more information about Angela Merkel

and her visit to Brussels on the Yahoo says more than one billion

user accounts may have been affected in a hacking attack

dating back to 2013. The internet giant says it appears

separate from a breach disclosed in September involving some 500

million accounts that Yahoo said names, phone numbers,

passwords and e-mail addresses were stolen, but not

bank and payment data. We will talk some more about these

stories when