20/06/2017 World Business Report


20/06/2017

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Now it's time for World Business Report.

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Business after Brexit - the UK finance minister

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delivers his so called Mansion House speech to business leaders

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in the City of London - so what will he promise

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Our man at the Paris airshow checks it out.

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Welcome to World Business Report - I'm Sally Bundock -

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also in the programme a warning Australia's banks

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Rico will have the details in a moment.

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All eyes are on the UK's finance minister today

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as he outlines his vision of Britain after Brexit.

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The Chancellor of the Exchequer, Philip Hammond is delivering his

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famous Mansion House speech in London -

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one of the biggest set-piece events of Britain's economic calendar.

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It's been given added importance by the fact that Britain

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has finallky started Brexit negotiations

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Mr Hammond has been at pains to calm fears of an abrupt change

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to relations between the EU and Britain -

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saying he wants the UK to experience trade in a way that "feels as close

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as possible to the way it feels now".

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He acknowledges the UK will leave the single market

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but insists it should reach a deal that allows British goods

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to flow without tariffs, delays and bureaucracy.

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And he stresses it would be "a very - very bad outcome" if no

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That's despite the Prime Minister Theresa May's

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mantra that no deal is better than a bad deal.

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With me is Jonathan Portes - Professor of Economics at Kings

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Good morning. We were all watching David Davis meeting the EU's

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equivalent Michel Barnier. Today it is Philip Hammond setting out his

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message. He is trying to reassure business that they will be no cliff

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edge Brexit. We are still headed for hard except, leaving the customs

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union and the single market. He will try and reassure business that he

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will do his best to ensure that won't happen on March 29 2019. There

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will be a transitional period where he hopes things will carry on like

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they are now. How do you think he will try to make that happen or

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guarantee that, given the fact that even yesterday, David Davis has

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given ground already? David Davis has given ground. David Davis said

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the row over summer will be a round sequencing whether we will start

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talking about trade at the same time as we started talking about the

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subjects that the EU wants to talk about, our expert Bill and what

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happens to EU citizens here and Britons in Europe. It wasn't a row

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at all. We in the UK have simply accepted the EU's terms on this but

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that means we have to sort out all those difficult issues about the

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terms of our excellent, the so-called divorce Bill, whether EU

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citizens here and Britons abroad have the same rights. We have to

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sort of all of that out before we start talking about the transitional

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period, if there is going to be won, and what it will look like. That is

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critical to business owners here and also on the content. -- continent.

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What can we expect from Philip Hammond? There will be a war of

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words. He will say what people want to hear and that we will be seeking

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some kind of regulatory equivalents after Brexit. So this is important

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to the city of London, just to explain it to the viewers who are

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unaware. Jetta it will give some assurance that some at least of our

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financial sector could continue to trade and operate businesses in the

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rest of the EQ the way it does now. -- it will give some assurance. --

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EU. It would require all the 27 governments to give a mandate to

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negotiate is to talk about and at the moment, there is little sign of

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it. Mr Hammond can't deliver on the war of words, possibly. Very thing.

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When he starts to deliver the speech, we will be a cross that here

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on the BBC. We have to move on. The credit ratings agency Moody's

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has downgraded 12 Australian banks, including the country's four

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largest, blaming elevated risk Rico Hizon is in our

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Asia Business Hub in Singapore. Is a bubble about to burst? Hope the

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Lynott. That's why we have seen the major ratings agency doing

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everything they can to downgrade some of the major banks in

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Australia. -- hopefully not. We have seen real estate prices in Australia

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almost doubling from levels in 2009. That's why Moody's has downgraded

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the big four banks. ANZ, Commonwealth Bank, National

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Australia Bank and Westpac by one notch, together with the eight other

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smaller banks. Share prices of Australia's big four banks are

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currently falling in Sydney trade by around .5% - 1%. Fitch earlier this

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year lowered its outlook on the sector but left ratings unchanged.

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It was Moody's that was quite aggressive with they get downgrade.

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-- with their downgrade. The only way they could be an upgrade is if

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they see a period of relative stability when household debt

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doesn't increase much further from current levels. This gives the

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household a chance to reduce their leveraged and when the mortgage is

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start to perform, this is a benefit to the banks. It won't happen

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overnight. Maybe several years before this could turn around.

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The Paris Airshow, which is taking place this week, is best known

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as an aerospace industry jamboree - dominated by the multi-billion

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dollar deals announced by the big beasts of the sector.

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And some of them have rather imaginative ideas -

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Our reporter Theo Leggett has been taking a look at one gadget

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which promises to help car drivers rise above the traffic jams.

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Here we are at the Paris Airshow and an sitting in a car but not just any

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car. Let's look at this one. It is rather special. Quite cramped and

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there is a reason for that. If we go around the front, as you can see,

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aerodynamic, streamlined, very nice. It is a bit long because this... It

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is at the airshow, it is a flying car. Not just a prototype. This one

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can really take off. Watch the video.

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Impressive, isn't it? And it doesn't actually have some neat party tricks

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as well which we will show you in a minute. Come over here. I want to

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talk to one of the men behind it from the Slovakian company behind

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this elegant beast. What is it for and who will buy it? It is a tech

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knowledge it demonstrated for what we see as a large challenge and

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opportunity. -- technology. It creates a level of demonstration and

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therefore it will be seen by early adopters and people who want to

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encourage the development of these types of vehicles.

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Time Warner and Snap have agreed to develop original scripted dramas

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Time Warner brands HBO, Turner and Warner Bros will also

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advertise on the augmented reality and messaging platform.

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The deal is reportedly worth US$100 million.

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The tech stocks are back. Technology stocks were climbing again on the

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NASDAQ index on Wall Street and that is pushing technology stocks higher

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in Asia today. You can see Hong Kong down and the price of oil $47 per

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barrel. In the US, you have a sense of how things ended there. The

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NASDAQ rebounded. And they are all headed higher. How long will it

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last? I will be back in a moment. Stay with us.

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