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tv   BBC Business Live  BBC News  May 18, 2017 8:30am-9:01am BST

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this is business live from bbc news with ben thompson and sally bundock. from trump bump... to trump slump. global market turmoil intensifies with wall street experiencing its worst day since the presidential election. live from london, that's our top story on thursday 18 may. stock markets around the world are nervous that the political controversy around president trump will overshadow his long—promised tax reforms. we will have the details. also in the programme — alibaba heads west. china's 300 billion dollar e—commerce giant looks to america — but can it take on its us rivals? and this is what the numbers look like at the start of trade in europe as that trump slump rolls around the world.
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and working on the move. we hear how the man behind regus serviced offices turned his quest to find a flexible workspace into a multi—billion dollar empire. and if you struggle with recycling, you're not alone. the worst products to recycle have been named and shamed — so we want to know what are your recycling frustrations? get in touch use the hashtag #bbc biz live. send us your comments about that. my question is whether you can put envelopes in recycling if they have the plastic window? hello and welcome to business live. for months, optimism about the trump presidency has been powering markets to record highs. but late on wednesday the trump bump turned into the trump slump — as us stocks and the dollar suffered their worst day
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since before the election. it's down to growing concern that the president's promised tax cuts and pro—business reforms may never materialise, as the white house battles one controversy after another. let's show you the numbers. the dow jones industrial average fell 372 points, and both the dow and s&p 500 suffered their worst falls in percentage terms since september. the nasdaq had its biggest loss for almost a year. that is what markets are looking like. we will talk more about the dollar ina like. we will talk more about the dollar in a moment. the last time the nasdaq fell this much was when the nasdaq fell this much was when the uk voted for brexit. this is the us dollar against ten leading currencies over the last year put up it has lost all of its
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game since donald trump became president and is now back to where it was last november. look at the spike and fall away again. 0ur economics editor kamal ahmed is here. thank you for being with us in the studio. we were anticipating this rally would not go on and on but the political turmoil has really intensified in the last 48 hours with regards to president trump. that was the trigger. what has been happening is there have been some headwinds growing against this exuberance that was in place after donald trump was elected with this big promise about tax reform, appropriateness agenda, doubling gross in america. —— a pro business agenda. there was inability in the white house to drive through legislation in the houses in congress. they were both run by republicans. that reform failed.
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there was a wobble around that. then the 01 growth figures for america we re the 01 growth figures for america were the weakest in three years. has the american economy been doing as well as people thought? another wobble. then, exactly as you say, there was always an idea, would donald trump as president be like campaigning trump or would he become a more traditional political figure? the political controversies have continued and so there is a volatility in politics which i think has now led, this has been a spark for people looking back to the reform agenda, will the tax reforms come through? is the american economy doing as well as people thought? the political turmoil will continue. suddenly it is a risk of. if you are things like treasuries and defence investments like utilities and properties, they are
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all up. things like the equity markets, they are all down. people have gone risk off. safe havens is very attractive right now with the price of gold going up, etc, and began getting stronger. there is a lot of disappointment within the business community in the us and elsewhere about the fact, his priorities in a way. they wanted these economy boosting members, tax reform, that kind of thing to come in much sooner. we are beyond the 100 days and all of that. now there is this political storm. they have realised that the politics makes chances of that getting through the houses more difficult. and, of course, the fact is that the republicans may not be in control of both houses by the time president trump gets halfway through his presidency because of the elections.
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he has a rather small window. if he does not get the report was through, you are right. people believe there will be reform but there are risks that the reform may not happen and they have increased. someone on the campaign trail promises one thing and does not necessarily deliver.m was a question of, would there be greater stability once he was president and once he surrounded himself with businessmen from goldman sachs, for example? as a president, he was quite similar to how he campaigned. to the traditionalist it all seems quite random things would happen in different ways. that means the volatility is still barefoot about is why people are pulling back a bit and the trump ‘s aid has come after all the exuberance. let's take a look at some of the other stories making the news...
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there have been protests in brazil over a fresh corruption allegation. president michel temer has denied a report that he authorised bribes to silence a possible witness in a huge corruption scandal. a brazilian newspaper says it has obtained recordings of a discussion between the president and the chairman of the giant meat—packing company, jbs- us and eu officials have decided not to impose a ban on laptops and tablets in cabin baggage on flights from europe. but after meeting in brussels to discuss the threat to aviation safety, officials said other measures were still being considered. america has previously said it wanted to extend the ban — which covers eight mostly muslim countries — to europe. let show you a story about facebook.
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the competition commissioner has been tweeting about this. that is a really interesting story thatis that is a really interesting story that is emerging. she was a guest on this programme. some of the tweets you have been sending in today. we asked, what are your frustrations with regard to recycling quest of their rather the top six offenders. coffee pods are the worse things. paul says, trying to remove bubble wrap from jiffy bags drives him mad. you peel the little plastic window. is that how it works? you put the paper in the recycling and the plastic in the bin. keep your comments coming in. keep your comments coming in.
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to japan now, where economic growth is picking up fast — in fact much better than expected. japan's economy grew at an annual rate of 2.2% in the first three months of the year. it's the fifth quarter in a row that growth has improved — that's the best run in more than a decade. are we getting excited about this thinking it is finally working? seijiro takeshita is in tokyo for us, he's a professor at the university of shizuoka. always good to see you. put it into perspective for us. is the prime minister thinking this is working or are we getting over excited? u nfortu nately, are we getting over excited? unfortunately, it is the latter. last year rises were horrible because of the bad weather. we are getting much better in terms of capital expenditure by corporations. you need to see a wage rise boosting
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private consumption that is not happening and i do not think it will happening and i do not think it will happen considering the conservative nurse of the japanese companies. as we said, the third quarter in a row that growth has improved and the best run for more than a decade. we have been keeping such a close eye on it stopped expectation forjapan has always been so high. is the worst over? we will face a lot of ambiguity, particularly in the united states, and also in europe. the growth you have been talking that has been driven by exporters. where we are seeing ambiguity factors overseas, there is cloudiness in the forefront. that is one reason why people are not rejoicing as numbers suggest. thank you for your perspective on the latest news out of japan. joining us is jane foley, senior currency strategist, rabobank. you have been listening to all these conversations about what is going on in the united states. we have been talking about japan with currency
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playing a huge part and the dollar weakening significantly. this does not help tokyo at all. give us your ta ke not help tokyo at all. give us your take on all of this. the yen is a safe haven. whenever there is little attention the yen goes up. the dollar perhaps is more interesting. it has a very murky relationship with safe haven flows. the us treasury market, us government debt, isa treasury market, us government debt, is a prime piece of paper people wa nt is a prime piece of paper people want at times of political stress. that can support the dollar. now the dollar is under pressure because the market is disappointed the reform programme may not happen. a quick word on that. we talked about at the start of the programme, what was happening in the united states. is it general disappointment that all of the sugar high we got on the campaign trail may not turn out to be much? if we look back to where the markets were today compared with where they were, there is a big
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change in us equity markets. they hope the reforms that donald trump made would cut away a lot of regulation and boost growth. donald trump is so busy trying to firefight with all of these scandals. here in europe, the uk has had a lot of economic data this week. more today could give us your expectations. the trend we have been seeing in retail sales since december has been one of weakening trend. the reason for that is inflation. inflation is rising at a higher rate than wages. we have had confirmation of that. that means the money we have in our pockets after we spend out on items like food and petrol is less. that is down to the weakness of the pound. it is down to the weakness of the sterling exchange rate relative to this time last year. jane will return. sharing with us your
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recycling frustrations. indeed. she has got the list. alibaba — the chinese e—commerce giant that's been described as the country's ebay and amazon rolled into one, is expected to report another jump in profits later today. it shares have been soaring since it floated in new york and it now has a stock market value of $300 billion. the vast amount of the business is in china which is something billionaire to change. he loves this country and he loves china. for president trump, the best way forward jack to show his love this country is to make it easier for americans to sell their wares to china. this sneaker shop in manhattan is an example. it has a physical store but 90% of the business is done online. since august but they have been selling on
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alibaba august but they have been selling on aliba ba and it august but they have been selling on alibaba and it has been a big boost to their sneaker empire. over $100 million this year. they run like a start—up, which has been really refreshing. we're not —— they treat us refreshing. we're not —— they treat us like we are a trusted multi—billion dollar company. us like we are a trusted multi-billion dollar company. the leader of china's big asked —— biggest e—commerce retailer wants to bring business to china and 2 billion customers in the next decade. they have been talking about making a big push out of china since they became public company and prior to that when they filed to become public and number of years ago at this point. if you look at the revenue base, it is almost entirely treated to china. they might well have aspirations and talk about
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that. the numbers suggest there is a lot of work to be done on that front. he is not afraid of a little ha rd front. he is not afraid of a little hard work. you will be in the us next month to make his pitch directly to us businesses. itjust may be an uphill battle. still to come... an office on the move. we meet that man cashing in on the flexible working boom — it's made him a billioniare and says brexit could be good news for his business. you're with business live from bbc news. here is a pet peeve we have been discussing this morning. do you find it hard to know what you can and can't recycle? i think we all do, especially where we live, all different rules for different boroughs. if so, you're not alone. and today the worst items to recycle have been named and shamed. pringles tubes and lucozade bottles topped the list as roger harrabin reports.
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we are running short of holes in the ground to swallow our rubbish. yet landfill sites are peppered with products that are supposed to be recyclable. why is that? the trouble is that so many products nowadays have several different types of materials in their packaging. that can make them almost impossible to recycle. take this. pringles. recycler‘s enemy number one. you have the plastic lid. the foil top. the foil interior, the cardboard sleeve, the metal bottom. it is a nightmare. and take these bottles. there are different plastics in the base of the bottle and the top. or this meat. black plastic is virtually useless for recycling. so what will stop us dumping complex packages straight into the bin?
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well, prince charles is launching a $2 million prize to stimulate new and more environmentally friendly designs and packaging. if the competition works, it will be easier in the future to shop for items that do not fill a landfill. 0ne one interesting point from fine repair cafe, it gives you an indication of where they are coming from, suggesting that you need to repair more stuff, bring broken stuff in the repair, we achieve a 63% the pay rate. repair, repair, repair. another big story today, royal mail posting a big rise in profits as parcels improved. i assume the money they make from delivering parcels is improving, annual profits up by 25%. growth in
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parcel delivery business, it would seem parcel delivery business, it would seem it is doing well. it does well from online, we send fewer letters but we get more parcels delivered because of our online shopping habits. full details on the website. european markets, markets worldwide, we are watching them very closely as the turmoil surrounding the white house and the trump administration intensifies. so let's quickly show you how things are going right now so you have a sense of how the european day is progressing. down half a percent in london and elsewhere. this was after quite heavy losses yesterday as well for the european markets, so not a change in sentiment yet. the big question, can president trump get through those reforms he promised? markets are increasingly doubtful that will happen. all businesses need somewhere to work but for many being able
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to shrink or grow their office is neither easy nor cheap. so companies that provide rented work spaces are growing quickly — cashing in on our need to be more flexible. london is the world's largest market for flexible serviced office space with around $21bn — that's £16 billion worth of space available. the usa and uk top the list for co—working , that's when you share a work space with other people who work for other companies. and it's notjust freelancers and small businesses that use them, big multinationals like google, hsbc, mckinsey and microsoft do, too. and perhaps that why it's been such a profitable business for iwg — its brands include regus and has 3,000 centres in 110 countries across the world. it's the result of nearly 30 years work for founder mark dixon. i caught up with him at one of his co—working spaces here in london to hear how it
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all began. i started off with sandwiches, delivering them on a bicycle, i didn't have my driving licence at the time. the business was a failure but my customers were very happy. just tell us how that prepared you for running regis now, which is huge and 110 countries. i worked out i needed more experience. i travelled all around the world, did lots of different things working for other people, gaining experience. but with a goal. the goal was to run my business and do it well. so what inspired you to start regus?” business and do it well. so what inspired you to start regus? i had my first expenses myself trying to getan my first expenses myself trying to get an office and i could see other people were having the same
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problems, they were meeting in coffee shops accept. i thought there was an opportunity and from that single centre we still have we now have over 3000 buildings. what makes you the person that can do that transition? you have to be someone willing to learn, adapt. you have to be adaptable camier have to be able to hire good people, build a team. we are in a fast growing industry, this is a new sector, this is new real estate, how people can work in the future. yes, there is more common vision that everyone is growing in this marketplace. but it isa growing in this marketplace. but it is a marketplace where you truly have to be global, you think, to survive? what is important is to have national networks, so we are growing in each country national platform so companies within that country can work anywhere, people can work from home, dropped in. it isa can work from home, dropped in. it is a new way of working. so scale in a country is probably more important than global scale, but the two work
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together. london is an extremely busy city for you, probably the most important in europe, in terms of demand for your services. how does brexit affect what you do?” demand for your services. how does brexit affect what you do? i think we are concerned about brexit, but we are concerned about brexit, but we are concerned about brexit, but we a re pretty we are concerned about brexit, but we are pretty bullish on the uk market. so what we can see is uk companies very adaptable, a lot of companies very adaptable, a lot of companies adopting new flexible work practices, so although there may be changes that will come once brexit finally arrives, there is lots of ru nway finally arrives, there is lots of runway for our particular business and the whole of the uk and in london. did you want brexit? diyas. iama london. did you want brexit? diyas. i am a european at heart, you know, i love europe. the environment we are in at the moment where political risk is such a big deal. for exa m ples over risk is such a big deal. for examples over the last couple of yea rs, examples over the last couple of years, elections and the united states, we have one coming up here
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in the uk, france, germany, not to mention asia, where you have a big presence, how do you measure something like political risk? generally speaking, all of these things are not bad things far business because we are providing businesses with flexibility at variable cost. but do shocks like poor example the 2008 financial crisis actually give you an opportunity? the short answer is yes but i would rather not do 2008 again. all of these shocks make companies think more deeply about how they are operating, how can we become more flexible? and especially in real estate, which is one of those fixed things that most companies rarely have difficulty changing, difficulty reducing cost, difficulty in making that variable. so what is next to you? you have a lovely home in monaco, are you going to retire and enjoy the super yachts? what are you going to do next? i have got to finish this job first. this, for me, is really a job
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thatis first. this, for me, is really a job that is unfinished. i think the best time for our businesses is coming now. the new digital world, more competition from new players. i love business, it sort of like a sport, it's absorbing, it's passionate. so i think it's absorbing, it's passionate. so ithink our it's absorbing, it's passionate. so i think our best time is yet to come, think there are enormous possibilities, so i am quite excited about the future. i am not ready to retire just yet. he absolutely showed no signs of wanting to retire, that was mark dixon, who started his career delivering salmond is on a bike. jane is back with us to talk through some of the papers. we have been asking people about their recycling horror stories, this was after the six worst offenders were named in shaded and, pringles tube ‘s, lucozade bottles stop you are a fan of recycling, you are building an eco—home? recycling, you are building an eco-home? i am definitely trying to build an eco—home. it is very slow. but i think we all have a
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responsibility for recycling, and of being conscious of the legacy we are leaving on this planet. but one thing, despite all the different bugbears i thing, despite all the different bugbea rs i have, thing, despite all the different bugbears i have, one thing that comes as a common to nominate, and thatis comes as a common to nominate, and that is the amount of packaging and the amount of difficult to recycle packaging. i think the manufacturers need to be told that there need stability packaging, because the amount of rubbish that one family can produce in just amount of rubbish that one family can produce injust one amount of rubbish that one family can produce in just one week is huge. it is phenomenal. it is huge, it takes a huge amount of and we need less of it. i agree with you jane. the sponsors frustrated, every packet is currently not recyclable. having four bins in my kitchen but i am happy to cycle. that might be the future. thanks, jane, good to see you and to have your company as well goodbye. yesterday we had huge contrasts in
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the weather. some areas were sunny, others had rain all day. particularly central and eastern areas of the country were wet. in some areas, around 40 millimetres of rain, so some big puddles out there. they different story today, more sunshine, but also some showers. some of them could be heavy. we are talking about brief spells of rain and then back to sunshine. this is the weather front that brought the rain yesterday. you can see it clearly affecting eastern areas of the uk. slipping out into the north sea, still some cloud linked to that weather front in the far south—east but the main point is that much fresher atlantique air is following in behind this weather front, fresher atlantique air is following in behind this weatherfront, so feeling a lot fresher already this morning. this is the scene around 11 o'clock, temperatures around 13 or 14 degrees. after a fairly nippy start, temperatures early on were only about five or six tabriz in many areas. showers starting to break out already across one or two places. at this stage, still 12 in
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belfast with some sunshine and again showers starting to break out across some eastern and southern parts of scotland. basically, through the course of the day, the further east and south—east you are, the drier it will be, but perhaps a bit more cloud in london and norwich. whereas western areas catching if you showers, and some of the showers in northern ireland could be heavy and thundery, also heavy and thundery across eastern and northern parts of scotland. watch what happens later on today, coming to this evening, rush—hour and this evening, the rain comes back again in the south—eastern and eastern areas, all the way up into hull. western areas this coming night should be dry. plymouth, cardiff, belfast, glasgow, all of these area staying dry tonight, whereas the further east you live the wetter it will be. and tomorrow, overall, another different day, it will be overcast across many parts of england. there will be some outbreaks of brain, some will be heavy, but across more western and south—western areas, certainly some sunshine around but here too at
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times you will catch some rain and a lot cooler tomorrow. temperatures in some areas 12, 13, 14 degrees. now the weekend, for a time there will be some rain around across central and northern scotland which will pull away to the north and then really overall for most of us this coming weekend, it is not looking too bad at all. there will be sunny spells, if you showers but the evenings and nights will be chilly. hello. it's thursday, it's 9 o'clock. i'm martine croxall in for victoria. welcome to the programme. winter fuel payments will be stopped for wealthier pensioners and changes will be made to the way people are assessed for social care. two of the headline policies in the conservative manifesto to be launched today. everyone will have the security of knowing they can pass on one hundred thousand pounds to their children and grandchildren. at the moment you can be cleaned out to as little as £23,000, so that's four times more. 0ther promises include a renewed pledge to cut immigration to the tens of thousands and plans to end free school meals for infa nts.
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we'll have all the details. also in the programme, lauren sandell was 18 when she died of meningitis w in herfirst term at university. her mother will tell us why it's vital that sixth—formers get
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