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