:00:00. > :00:13.with Sally and World Business Report.
:00:14. > :00:16.Business leaders and investors are braced for the British Prime
:00:17. > :00:31.continues to sink against the US dollar.
:00:32. > :00:35.And we gauge the mood among the delegates gathered in Davos.
:00:36. > :00:38.With the rise of populism are the elite in retreat?
:00:39. > :00:46.In a moment I'll be talking to Inga Beale, the Chief Executive
:00:47. > :00:50.of Lloyds of London who is at the World Economic Forum.
:00:51. > :00:52.Theresa May will today deliver a highly-anticipated speech
:00:53. > :00:58.on the UK's future outside the European Union.
:00:59. > :01:01.The speech will focus on global Britain and how the UK
:01:02. > :01:04.can be an outward facing nation as it seeks new post Brexit
:01:05. > :01:05.relations with its trading partners.
:01:06. > :01:09.Reports over the weekend suggest the British Prime Minister will use
:01:10. > :01:12.today's speech to signal the UK will pull out of the EU single
:01:13. > :01:20.market, although Downing Street described this as speculation.
:01:21. > :01:23.Despite this, the pound hit its lowest level
:01:24. > :01:25.for more than three months on the reports,
:01:26. > :01:28.sterling dropping more than 1% to below $1.20
:01:29. > :01:33.The EU single market guarantees the free movement
:01:34. > :01:36.of goods, capital, services, and people but the UK government has
:01:37. > :01:40.indicated they will want to limit the movement of people as part
:01:41. > :01:50.With me is Kathleen Brooks, Research Director at City Index.
:01:51. > :01:58.Good morning, nice to see you. It is the most anticipated speech,
:01:59. > :02:02.probably one of the most important in her career so far? About
:02:03. > :02:08.absolutely, and the markets are fully focused on this. It they have
:02:09. > :02:12.already priced it in almost, they're not confident about what she has to
:02:13. > :02:16.say so she will have to deliver big to turn the pound around because
:02:17. > :02:21.it's been an incredibly volatile currency in the last six months and
:02:22. > :02:24.mostly negatively. Most are expecting more negativity today
:02:25. > :02:30.because if she does say what we're all expecting, Brexit means Brexit,
:02:31. > :02:34.what some would describe as a hard Brexit, as in we are fully out as it
:02:35. > :02:39.were, and she doesn't want to have any similar deal to that of other
:02:40. > :02:43.countries, it would have a big reaction in terms of the pound?
:02:44. > :02:48.Certainly it's not fully priced in what a hard Brexit is and we're
:02:49. > :02:52.going to get a new reality of that hard Brexit today, but if she's
:02:53. > :02:56.going to announce we will leave the EU, leave the single market, leave
:02:57. > :03:02.the customs union, is there going to be a void? In one speech she surely
:03:03. > :03:06.can't say what will fill that and that will give investors another
:03:07. > :03:09.reason to worry, we may see further downside for the pound but the FTSE,
:03:10. > :03:16.which has done well since the vote, could worry on the back of that as
:03:17. > :03:20.well. Including those running businesses, big exporters, those
:03:21. > :03:24.trading with Europe all the time, 50% of exports go to Europe, does
:03:25. > :03:28.this give them time to prepare whether they think it's a good or
:03:29. > :03:33.bad idea to get ready for the possibility of us being completely
:03:34. > :03:38.out? It depends if they have a transition deal, that is what they
:03:39. > :03:42.hoped for, to see us through the period of negotiation. That's what
:03:43. > :03:48.the big businesses will do but if the pound takes a dip significantly
:03:49. > :03:53.below $1 20 then she will do those exporters a favour. For the City of
:03:54. > :03:59.London, I would assume it has so many ramifications and for financial
:04:00. > :04:04.centres in Europe, they will look for a special arrangement or special
:04:05. > :04:07.deal? It seems like that but the special arrangements aren't likely
:04:08. > :04:12.to be mentioned in this speech, largely because she has to keep some
:04:13. > :04:15.of her cards behind but we know the chief negotiator from the European
:04:16. > :04:19.side has said he doesn't want a disorderly Brexit and he wants
:04:20. > :04:24.European financial sectors to have access to our financial sector. It's
:04:25. > :04:29.a 2-way process and the Europeans know keeping the financial centre of
:04:30. > :04:34.London stable in this period is as beneficial to them as us. Also when
:04:35. > :04:38.you look at the politics, many in Parliament are saying, hang on,
:04:39. > :04:43.there's still a way to go in terms of the legality of the whole thing?
:04:44. > :04:47.Definitely, we haven't had the court ruling on Article 50 so it's likely
:04:48. > :04:51.if she does say we are leaving the single market there will be cries
:04:52. > :04:56.from the opposition saying she can't do it because chances are we will
:04:57. > :05:00.get that court ruling on Article 50 and she will have to put whatever
:05:01. > :05:04.plan she's going to put to Europe to the parliament. She has many
:05:05. > :05:08.constraints about what she can say, what is legal and how she packs the
:05:09. > :05:13.market, a huge balancing act. Thank you for coming in. We will be right
:05:14. > :05:19.across all the reaction when she does deliver her speech later today.
:05:20. > :05:23.Also on the agenda in a few hours, Xi Jingping is expected to look for
:05:24. > :05:26.more inclusive trade deals as he becomes the first-ever Chinese
:05:27. > :05:28.president to attend the World Economic Forum in Davos.
:05:29. > :05:31.This year's gathering of global leaders is focusing on how
:05:32. > :05:33.policymakers should respond to the rise in populism
:05:34. > :05:35.and protectionism currently sweeping the globe.
:05:36. > :05:46.There's a chill wind in Davos this year, and I'm not just talking about
:05:47. > :05:52.extremely low temperatures and piles of snow. The political backdrop is
:05:53. > :05:56.also pretty unforgiving. Top names from the worlds of business and
:05:57. > :06:02.politics are meeting here to cut deals at a time when a backlash
:06:03. > :06:08.against globalisation and elitism is only gathering pace. The forum's
:06:09. > :06:17.pounder says social inequality will not be reduced by raising barriers.
:06:18. > :06:25.I hope that all countries will favour open global systems, may be
:06:26. > :06:31.fairer global systems. I think we will have as a whole, as a world, as
:06:32. > :06:40.a whole, we will have a big setback if we go back to the old times of
:06:41. > :06:45.big walls around our nation states. And stepping in to champion the pro-
:06:46. > :06:52.trade message this year is Chinese President Xi Jingping. Traditional
:06:53. > :06:56.protagonist, America, is keeping a low profile, allowing the world's
:06:57. > :07:03.second largest economy to take centre stage. A welcome prospect for
:07:04. > :07:08.young trade entrepreneur Leila Dong. President Xi coming to Davos shows
:07:09. > :07:11.the world a statement that China is very willing to take the world
:07:12. > :07:15.leadership role and also working closely with other countries in
:07:16. > :07:20.terms of world security, globalisation and providing more job
:07:21. > :07:25.opportunities. And he has a very high profile audience for his
:07:26. > :07:31.message. Other top attendees include Colombian singer Shakira. Facebook's
:07:32. > :07:37.Cheryl Sandberg. Ali Barack Obama's Jack, and the IMF's Christine
:07:38. > :07:43.Lagarde. But in battle to European leaders Francois Hollande and Angela
:07:44. > :07:48.Merkel are staying away. For those who feel they can tear themselves
:07:49. > :07:52.away from domestic troubles, the World Economic Forum will be awash
:07:53. > :07:56.with ideas and debate as to whether ever freer trade is now a certainty.
:07:57. > :08:00.Tonia Beckett, BBC News, Davos. Well, let's go live to Davos
:08:01. > :08:05.and talk to one of the delegates attending, Inga Beale,
:08:06. > :08:13.Chief Executive of the insurance Nice to see you again. We spoke this
:08:14. > :08:17.time last year when you were at Davos. There's a very different mood
:08:18. > :08:25.this year given Brexit and the outcome of the US election. Yes
:08:26. > :08:29.indeed. Brexit is going to be one of the topics I'm interested to learn
:08:30. > :08:34.more about today. Obviously we're going to hear Theresa May talking
:08:35. > :08:38.later. But interestingly we're still going ahead with our contingency
:08:39. > :08:42.plans, we're not going to put those on hold because I don't think we'll
:08:43. > :08:47.get any real secrets about what will be in store for certainly the City
:08:48. > :08:51.of London. So I'm here to perhaps have some meetings that will be
:08:52. > :08:56.useful in terms of where should we go to set up our subsidiary when we
:08:57. > :09:01.have to do that in the EU. And that seems to be what you and other big
:09:02. > :09:05.institutions in London are thinking at the moment, isn't it crazy that
:09:06. > :09:11.you have to have a contingency in Europe on the continent given the
:09:12. > :09:19.fact Theresa May clearly is going down the hard Brexit route. Yes. We
:09:20. > :09:23.must bear in mind for Lloyds, being a very global business, it's
:09:24. > :09:27.affecting directly about 5% of our business. So we're looking to set up
:09:28. > :09:39.a subsidiary just to protect that 5%, not the whole thing. Is she
:09:40. > :09:44.right to take this line? In terms of being quite tough? Well, I think she
:09:45. > :09:49.has to be quiet on some of the France in terms of not revealing the
:09:50. > :09:54.negotiation tactics. I think for business, though, I think we've got
:09:55. > :09:59.to take our own precautions cash fronts. We are in the risk business
:10:00. > :10:04.being in insurance so we want to make sure we're around and we have a
:10:05. > :10:08.secure future for our clients. Are you concerned about this period from
:10:09. > :10:14.now until we exit and the impact it will have, the uncertainty, the
:10:15. > :10:18.volatility? Yeah, it's always the uncertainty business leaders don't
:10:19. > :10:22.like and of course customers and all our policyholders don't like that
:10:23. > :10:26.either. That's why we're going to be securing our future regardless of
:10:27. > :10:32.the outcome of those negotiations. None of that means that it can't be
:10:33. > :10:36.perhaps rolled back if access to the single market can still be
:10:37. > :10:43.negotiated by the UK government. All right, chief executive of Lloyds of
:10:44. > :10:48.London, Inga Beale, thanks for joining us live from Davos. I will
:10:49. > :10:50.be back in a moment when we review all the stories in the news. Cabaye.
:10:51. > :10:57.-- goodbye. Elections have been called
:10:58. > :10:59.in Northern Ireland where the power-sharing
:11:00. > :11:01.government has collapsed. The Assembly will be dissolved
:11:02. > :11:05.later this month and the vote