:00:21. > :00:25.So, as the UK Prime Minister fights to stay in power, experts warn
:00:26. > :00:27.prolonged political uncertainty will take its toll on sterling and the
:00:28. > :00:30.economy. Not so in France -
:00:31. > :00:32.the euro strengthens as Macron's new party en Marche takes control
:00:33. > :00:46.of French politics. This is World Business Report, where
:00:47. > :00:48.we will now focus on the business and economic implications of the
:00:49. > :00:50.elections in the UK and France. Theresa May, has formed
:00:51. > :00:58.a new government but without a majority in parliament
:00:59. > :01:01.she is relying on an alliance with Northern Ireland's
:01:02. > :01:03.largest political party, But while the DUP insist
:01:04. > :01:10.their relationship with May's team has been close since she became
:01:11. > :01:14.Prime Minister, 11 months ago, any
:01:15. > :01:25.alliance will come at a price, An economic terms, they are less
:01:26. > :01:30.developed than the Republic of Ireland or the UK. It has low levels
:01:31. > :01:33.of productivity and is heavily dependent on the state. Those
:01:34. > :01:39.sectors apart from the state that it relies on our tourism,
:01:40. > :01:43.manufacturing, and food. And they need large supplies of low skilled
:01:44. > :01:48.labour, mostly from Eastern Europe, especially Poland. And if Britain is
:01:49. > :01:52.to lead the single market, and that is the stated policy, then the DUP
:01:53. > :01:56.may ask the Conservatives for an exemption when it comes to the free
:01:57. > :02:00.flow of labour to Northern Ireland. On top of that, they will want
:02:01. > :02:06.London to pick up the $450 million a year that Brussels seems to Belfast
:02:07. > :02:12.in agricultural subsidies. And that comes on top of the $1 billion a
:02:13. > :02:17.month that London fans already to Belfast. And then there is the
:02:18. > :02:21.political bribes, or poor, as it is known as. They will want more
:02:22. > :02:24.investment in infrastructure. That means that their roads and rail
:02:25. > :02:34.projects, which might otherwise be uneconomical, will be built, and
:02:35. > :02:36.will not be shut down. Those with some of the issues that could be the
:02:37. > :02:36.agenda. With me is Simon French,
:02:37. > :02:43.chief economist at Panmure Gordon. Good morning, Simon. So much to
:02:44. > :02:48.digest and discuss. For market a really uncertain time which they
:02:49. > :02:54.observe the head. But if we look at of the other issues, business
:02:55. > :02:59.optimism has plunged over the weekend. And as higher than it was
:03:00. > :03:03.after last year's decision on leaving the European Union. Give us
:03:04. > :03:07.your take on all of us. What you have is domestic economic
:03:08. > :03:14.uncertainty put on top of Brexit economic uncertainty. It is a double
:03:15. > :03:18.whammy. I think most assumed that the conservative manifesto was go to
:03:19. > :03:22.be lamented domestically. They knew that Brexit was an uncertain outcome
:03:23. > :03:26.for at least two years, but you now have that multiplied twofold. And
:03:27. > :03:30.therein lies a lot of deep sentiment that we have seen out of business
:03:31. > :03:34.over the weekend. If you add to that some of the economic issues on top,
:03:35. > :03:38.like consumer spending, the latest figures show that it is falling in
:03:39. > :03:43.May for nearly the first time in four years. This is inflation
:03:44. > :03:51.tightens its grip. There is a lot of headwind and stir -- sterling been
:03:52. > :03:55.depressed all the time. So how is this organ to play out when Theresa
:03:56. > :04:00.May is trying to me desperately, to stay in power, and form a government
:04:01. > :04:04.that she hopes will be stable and strong, but could be far from it?
:04:05. > :04:11.Consumer spending was all ready under pleasure. You mention the
:04:12. > :04:14.weakening sterling. -- under pressure. Households have pulled
:04:15. > :04:22.back on their spending as a result. That is a difficult backdrop for
:04:23. > :04:25.politicians while they deal with Brexit and pushing through a
:04:26. > :04:28.domestic agenda when they are going to give vital votes in Parliament.
:04:29. > :04:32.And additional public spending in certain areas to buy a vote is may
:04:33. > :04:36.well be the theme of however long as Parliament goes. And that does not
:04:37. > :04:41.always generate the best economic policy-making, because you end up
:04:42. > :04:44.having to appeal to people's political instinct, rather than
:04:45. > :04:48.assessing a project on its real merits. And business leaders and
:04:49. > :04:54.market watchers have two work out what it means, a conservative
:04:55. > :04:57.government with the DUP of Northern Ireland, and what that means for
:04:58. > :05:03.economic policy, but also the Brexit negotiations. Cheesemaker. So taking
:05:04. > :05:06.a conservative economic policy foes, adding additional spending in
:05:07. > :05:11.Northern Ireland will be a fan to try and secure the votes on a deal
:05:12. > :05:19.by deal basis. They can adapt to seek cross party support. On Brexit,
:05:20. > :05:25.there is a potential here for a softer version of Brexit is at -- as
:05:26. > :05:30.a result of backbenchers wishing the gunmen to this offer. Sterling has
:05:31. > :05:36.been so softer. -- pushing the government. You may well see a rally
:05:37. > :05:39.as the market looks at this and sees a softer Brexit down the pipeline
:05:40. > :05:44.that we would have assumed under a conservative majority. Thank you so
:05:45. > :05:47.much to your analysis this morning, Simon. There will be more of that,
:05:48. > :05:51.because in the news review, will be looking at some of the newspapers
:05:52. > :05:51.and what they are discussing this morning,
:05:52. > :05:57.following Thursday's election. But let's take you across the water to
:05:58. > :05:57.France. Things could not be any more different.
:05:58. > :06:00.The new centrist party of French President Emmanuel Macron
:06:01. > :06:03.looks on course to win a landslide victory following the first
:06:04. > :06:07.Projections suggest En Marche could get as many as three-quarters
:06:08. > :06:13.The final outcome will be decided at a run-off next Sunday.
:06:14. > :06:16.Mr Macron's party was established just over a year ago and many
:06:17. > :06:26.candidates have little or no political experience.
:06:27. > :06:29.Joining us now is Tomasz Michalski, Professor of International Economics
:06:30. > :06:32.at the HEC International Business School in Paris.
:06:33. > :06:42.Good morning to you. Give us your take on this, not landslide, but
:06:43. > :06:47.this extremely strong rally behind Emmanuel Macron and his new party,
:06:48. > :06:56.and what it means for the economy in France? Well, this gives a space for
:06:57. > :07:02.long-awaited reforms, that is for sure. Along with the Republican
:07:03. > :07:07.Party, which is going to have the larger part of the seeds of the
:07:08. > :07:19.remaining seats. We are looking into a 90% pro reform majority in the
:07:20. > :07:22.Parliament. So we can, this is a once-in-a-lifetime chance, that
:07:23. > :07:27.there is could be a reform agenda pursued. And already, we know what
:07:28. > :07:32.the first battle will be. It will be reforming even slightly the labour
:07:33. > :07:36.code. Let's talk about that. That was a key plank of his election
:07:37. > :07:41.campaign, that he would be the man to deliver on that, where Francois
:07:42. > :07:55.longed and Nicolas Sarkozy had failed. -- Hollande. But will he
:07:56. > :07:59.deliver? This is to be seen. The political situation, or you would
:08:00. > :08:08.think, could not be more favourable. Yet even with such a huge majority
:08:09. > :08:15.on the cards, his go to try to push the legislation for a fast track
:08:16. > :08:21.authority that isn't to limit their discussions in the Parliament. There
:08:22. > :08:30.would be to try and sign before September, when people return back
:08:31. > :08:36.after vacation. But this is made more surprising when Jean-Luc
:08:37. > :08:40.Melenchon said let's defend the labour code. So could be a heated
:08:41. > :08:47.fall, because the opposition will not be the Parliament, they will
:08:48. > :08:52.take to the streets. We have seen that before. Thank you for joining
:08:53. > :08:56.us this morning, Tomasz. Let's now mention what is happening at Uber.
:08:57. > :09:02.It has been in the headlines are lot lately.
:09:03. > :09:05.Uber's chief executive Travis Kalanick could be forced
:09:06. > :09:08.to take a leave of absence under changes reportedly being considered
:09:09. > :09:12.A decision on whether to alter Travis Kalanick's role was set to be
:09:13. > :09:15.taken at a meeting of Uber's board on Sunday.
:09:16. > :09:17.Reports also suggest the company's Chief Business Officer is planning
:09:18. > :09:23.All this trouble at the top follows a review in February after former
:09:24. > :09:26.Uber engineer Susan Fowler made claims of sexual harassment.
:09:27. > :09:32.There has been an investigation into that sense. Having a look at the
:09:33. > :09:37.markets began, now. The pound is still lag wishing after having
:09:38. > :09:43.fallen 1.6% from Friday. It is bumping along that low level. The
:09:44. > :09:49.euro is bumping along a little bit, and that is how the markets are
:09:50. > :09:51.changing in Asia today. -- trading. Stay with us. Much more to come in
:09:52. > :10:01.just a moment.