tv World Business Report BBC News July 21, 2022 5:30am-6:01am BST
this is bbc news with the latest business headlines for viewers in the uk and around the world. tax rises or tax cuts? two candidates, two views on tackling the worst cost of living in a generation. the end of free money in europe. the 19 nations that use the euro face their first interest rise in a decade — and some of them will find it tough. a government in collapse — and 2.5 trillion in the red. why italy is raising fears of a new european debt crisis. plus — tesla pulls the plug on bitcoin. selling three quarters of its holdings after a steep fall in the cryptocurrency.
we start here in the uk — where a final battle to become the next prime minister is taking place as the country faces the worst cost of living crisis in a generation. as you've been hearing, formerfinance minister, rishi sunak, and the foreign secretary, liz truss are the last remaining candidates. they will now face a vote by conservative party members around the uk — with a result expected in september. whoever wins could mean a very different approach to the economy. truss says "you cannot tax your way to growth" — she is proposing more than 30 million pounds in immediate tax cuts. sunak wants to delay the tax cuts until inflation is under control. "borrowing your way out of inflation", he says, "isn't a plan, it's a fairytale".
the economic challenges facing the next prime minister are huge. last month, the rate of inflation hit 9.4% the highest rate for a0 years — driven by a leap in the price of fuel, and also of basic foods like milk, cheese and eggs. our economics editor faisal islam reports. it is the staples, fuel and food going up last month that pushed inflation to a0 year high. this is what that means forfamilies in derbyshire and across the uk. in this community pantry finding demand rocketing at the same time as surplus supermarket supplies they rely on rental. we surplus supermarket supplies they rely on rental.— they rely on rental. we are shiftin: they rely on rental. we are shifting a _ they rely on rental. we are shifting a quarter - they rely on rental. we are shifting a quarter ton - they rely on rental. we are shifting a quarter ton of. they rely on rental. we are l shifting a quarter ton of food as demand keeps going up will run out in terms of being able to acquire enough food to feed people on a non—profit basis. even though here they can't
supply families with —— they can supply food the 10th of the normal price, some customers can no longer afford the bus fare to get here or the electricity to keep food fresh and hot weather. we electricity to keep food fresh and hot weather.— electricity to keep food fresh and hot weather. we have heard of --eole and hot weather. we have heard of people switching _ and hot weather. we have heard of people switching fridges - and hot weather. we have heard of people switching fridges and l of people switching fridges and freezers because they can't afford the electricity. actually, that's a really, really difficult choice to make but it doesn't save you a lot because the biggest part of your energy bill is the standing charge, you not saving much money and risking your own health and that of your family. now got a really good job my husband _ now got a really good job my husband works full—time, but things— husband works full—time, but things obviously with the cost of living — things obviously with the cost of living going up, it is tight _ of living going up, it is tight. we live hand to mouth. my friends told me about it so i'd started _ my friends told me about it so i'd started coming, _ my friends told me about it so i'd started coming, i- my friends told me about it so i'd started coming, i was- i'd started coming, i was embarrassed _ i'd started coming, i was embarrassed at - i'd started coming, i was embarrassed at first, - i'd started coming, i was| embarrassed at first, but i'd started coming, i was. embarrassed at first, but i don't _ embarrassed at first, but i don't feel_ embarrassed at first, but i don't feel embarrassed . embarrassed at first, but i. don't feel embarrassed about embarrassed at first, but i- don't feel embarrassed about it now _
don't feel embarrassed about it now. . , ., now. that is the impact of broad-based _ now. that is the impact of broad-based rapidly - now. that is the impact ofi broad-based rapidly rising broad—based rapidly rising prices in real life, this is what it looks like over decades. heading higherten what it looks like over decades. heading higher ten to 11% in the autumn, with food prices up 9.8% overall, but alone up 22%. fuel prices up a2% in energy prices are up 70% over the last 12 months. derby is a city famous for manufacturing, the bank of england ruled that labour shortages threaten to keep inflation higherfor shortages threaten to keep inflation higher for longer. shortages threaten to keep inflation higherfor longer. at inflation higher for longer. at this inflation higherfor longer. at this cutting—edge carbon fibre factory supplying formula 1 cars and fighterjets they are seen just that. we cars and fighter 'ets they are seen just that._ seen just that. we have training _ seen just that. we have training and _ seen just that. we have i training and development seen just that. we have - training and development in industry and they are long—term jobs. industry and they are long-term 'obs. �* , ., industry and they are long-term 'obs. �* ,~ industry and they are long-term 'obs. �* , , industry and they are long-term 'obs.�* , jobs. are you picking up labour from other— jobs. are you picking up labour from other sectors? _ jobs. are you picking up labour from other sectors? from - from other sectors? from hospitality _ from other sectors? from hospitality and _ from other sectors? from hospitality and care - from other sectors? from hospitality and care and i from other sectors? from i hospitality and care and that kind of area where they are predominantly lower payment areas. they come to us for
higher pay. areas. they come to us for higher pay-— higher pay. high prices for ener: higher pay. high prices for energy and _ higher pay. high prices for energy and a _ higher pay. high prices for energy and a weaker - higher pay. high prices for| energy and a weaker pound seeping into a pipeline that will last many months. this has one u- will last many months. this has gone up in _ will last many months. this has gone up in price _ will last many months. this has gone up in price by— will last many months. this has gone up in price by 50 - will last many months. this has gone up in price by 50 or- will last many months. this has gone up in price by 50 or 6096 l gone up in price by 50 or 60% in the last six to nine months. energy, currency. 0ne in the last six to nine months. energy, currency. one of the first steps to try to get this under control could be raising interest rates by 1.5% the largest rise in three decades but energy prices are due to rise again in autumn, pushing prices yet higher. basel is slim, in derbyshire. it's a big day for the 19 countries that share the euro currency. they are facing the first rise in interest rates in more than a decade. later today, the european central bank could raise its main deposit rate by half a per cent— taking it to zero. rates have been negative since 201a — effectively the ecb was charging banks to deposit money, incentivizing them to lend it out and boost the economy.
joining me now is jane foley, head of fx strategy at rabobank. good morning to you jane. the cbd will and crete rates today it has been talked about for months, some economists saying they are too late now?— they are too late now? that's riaht in they are too late now? that's right in the — they are too late now? that's right in the window— they are too late now? that's right in the window of - right in the window of opportunity to hike interest rates could be quite narrow for europe that's because already the market economist talk about the market economist talk about the possibility of recession. the risk of recession linked to gas prices, we know about the conflict in ukraine with russia, we know about the economic war between europe and russia as well, we know gas prices are already elevated going into that war and remain elevated with risk — it will limit further the gas supply coming into europe over the winter and that could be very high prices even rationing for many big industry groups in germany, maybe italy and that's
what could tip the economy there into recession.- what could tip the economy there into recession. what are our there into recession. what are yourthoughts— there into recession. what are your thoughts on _ there into recession. what are your thoughts on what's - there into recession. what are | your thoughts on what's ahead, markets are pricing and what they think will happen in the next few months, we have seen the euro parity against the dollar. the outlook is not good at all and that is hard for christine nygaard and her team at the cbd to manage. she christine nygaard and her team at the cbd to manage.- at the cbd to manage. she is walkin: at the cbd to manage. she is walking a _ at the cbd to manage. she is walking a narrow— at the cbd to manage. she is walking a narrow line - at the cbd to manage. she is walking a narrow line on - at the cbd to manage. she is walking a narrow line on one| walking a narrow line on one hand she needs to bring down —— inflation and inflation expectations by being hawkish on inflation, it's either going to be a 25 basis point increase or 50 basis point move and she said another move in september may be another 50 basis point move there. but people are already feeling the cost of living crisis that is likely that already growth is beginning to slow, consumer confidence and business confidence and business confidence has already gone down. on the other hand she has the crisis especially in italy, and what we are seeing their
investors taking fright that means the bond yields go up and that means the monetary tightening the interest rate increases are working more there, and she needs to manage that with a new tool called a fragmentation tool which is combining some of that back, but it is difficult and not all members of the cbd are in agreement as to how that should be done. i agreement as to how that should be done. ., �* ., ., , be done. i wouldn't want to be in her shoes. _ be done. i wouldn't want to be in her shoes. 0r— be done. i wouldn't want to be in her shoes. or any _ be done. i wouldn't want to be in her shoes. or any central. in her shoes. or any central bank at the moment. we will look at italy shortly. i want to get your thoughts on rishi sunak, liz truss where we are at in the race to become prime minister, the different policies on the economy, what is —— impact is this happening on the value of the pound which makes our cost of living worse? we import energy study has been
put forward performing badly all year despite the fact the bank of england has hiked interest rates five times before the start of the cycle, the political clout have been weighing on sterling the lack of momentum about where the economy is going. markets hoping for some clarity from the new leadership but the concerns of liz truss on unfunded tax cuts could be a concern for stealing and what is she going to do with the bank of england questions about limiting their independence, markets would like that either and that is a concern further into the autumn. joining me now live from athens is our business correspondent victoria craig. talk us through what the mood is like increase, it was famously bailed out at height of the eurozone debt crisis, this is an economy struggling
for some time and yet here we are with another cost of living crisis hitting europe? exactly, this is not _ crisis hitting europe? exactly, this is not a — crisis hitting europe? exactly, this is not a problem - crisis hitting europe? exactly, this is not a problem limited l this is not a problem limited degrees as we just heard is across the eurozone becoming a big for households. as james foley explained this is a problem for the cbd because when it starts raising interest rates that increases foreign cost which tames inflation also calls economic growth and so this is a problem the cbd will be trying to balance, you ask what the mood is like here i don't think people on the streets here where we are in the tourist centre near the acropolis are too concerned about what the cbd will say later today. about what the cbd will say latertoday. economists about what the cbd will say later today. economists are watching with a lot of focus because they want to make sure whatever happens doesn't disrupt the progress of the greek economy has seen since the debt crisis in the eurozone 11 years ago now.
to italy now — where prime minister mario draghi looks set to resign after losing the support of his coalition partners. the eu's third—biggest economy now faces elections — and more uncertainty over its economic policy. italy is struggling under a debt mountain that has soared to 2.5 trillion euros during covid — more than spain, portugal, greece and ireland put together. investors worry it's simply too big to bail out. lets go live to rome and professor michele geraci — a former undersecretary of state at the ministry of economic development in italy. good morning to you. are you expecting mario draghi to resign today and it to be absolutely this is what is going to happen this morning. it will go to the chamber and
then he will meet the president where he will resign this time resignation will be accepted. he has tried every thing and failed, so we are now going to elections. failed, so we are now going to elections-— elections. you are going to elections — elections. you are going to elections what _ elections. you are going to elections what is _ elections. you are going to elections what is the - elections. you are going to elections what is the likely| elections what is the likely outcome of that?- elections what is the likely outcome of that? almost a snap election like _ outcome of that? almost a snap election like in _ outcome of that? almost a snap election like in the _ outcome of that? almost a snap election like in the uk, - outcome of that? almost a snap election like in the uk, some i election like in the uk, some parties may not be ready people went expecting elections to be held in the next six months, going to be late september, october, i think it will be now for the first time a campaign during august, opening up the four parties to show what they are going to do to improve on what mario draghi has done over the last year and a half. many things we need to be addressed. good opportunity for many parties right and the engage domestically and for the first time foreign policy at the centre of this campaign.
politics in italy are notoriously unstable, many governments have come and gone in recent years. what is your hope for a new government coming into place, that it can effectively tackle the debt crisis, and the challenges facing the economy because that's actually a long—term scenario, that has to be worked out, therefore you need stable government for a long period for that to work? i government for a long period for that to work?— for that to work? i agree and what i for that to work? i agree and what i am — for that to work? i agree and what i am pushing _ for that to work? i agree and what i am pushing for- for that to work? i agree and what i am pushing for is - for that to work? i agree and what i am pushing for is to i what i am pushing for is to bring the data analysis back on the table of policy makers. 0ne the table of policy makers. one of the problems we are having in italy is that politicians tend to make decisions based on ideology, with no fact based even the sanctions on russia done without proper analysis, they are financing the war rather than hurting putin. what
i suggest is from now on we bring back academia, think tanks, experts, and ministers should make decisions because they have a vision but fact in analysis needs to be on the table for policymakers. and this is what i hope, and i know could happen going forward. a change in the philosophy of power the country could be run. we shall keep a very close eye, thank you for your time. stay with us. much more to come. tesla pulls the plug on bitcoin.. selling three quarters of its holdings. radio: i see you coming
down the ladder now. i that's one small step for man... ..one giant leap for mankind. a catastrophic engine fire is being blamed tonight. for the first crash - in the 30—year history of concorde, the world's only supersonic airliner. _ it was one of the most vivid symbols of the violence and hatred that tore apart the state of yugoslavia but now, a decade later, it's been painstakingly rebuilt and opens again today. there's been a 50% decrease in sperm quantity and an increase in malfunctioning sperm unable to swim properly. seven, six, five... thousands of households across the country are suspiciously quiet this lunchtime as children bury their noses in the final instalment of harry potter. this is bbc world news, the latest headlines.
a clear and present danger. president biden pledges to make the biggest ever investment to combat climate change, but stops short of declaring an emergency. his warning comes as wildfires continue to rage across europe. firefighters struggle in the heatwave to tackle flames in greece, spain and italy. the electric car maker tesla has sold off most of its holdings in bitcoin. the company's owner elon musk has been one of the most high profile cheerleaders for cryptocurrency and made waves last year when he revealed tesla made a major investment in bitcoin, which prompted a surge of demand for the crypto currency. but the company is now backing away as the value of bitcoin has plunged, falling by more than 50% this year. the announcement came alongside better than expected earnings on wednesday of $2.3 billion us dollars.
and that's despite a hit from covid—19 lockdowns in shanghai impacting production. here's our north america business correspondent samira hussain. the extended shutdown of the company's the extended shutdown of the compa ny�*s factory the extended shutdown of the company's factory in the shanghai assembly plant dealt a blow to its ability to produce vehicles, compared to the previous quarter, tesla made fewer cars and it made less money on the cars it did make, because of inflation and more competition for the components that go into electric vehicles, and like so many companies, tesla continues to grapple with supply chain disruptions. going forward, the electric car maker is keeping its goal of increasing deliveries by an average of 50% over the coming years. tesla's earnings are always of great interest to wall street, it is the most valuable car company in the world but elon musk�*s $aa billion bid to take over twitter means investors are even more keenly attuned to the
company's financials. the compa ny�*s financials. the billionaire company's financials. the billionaire ceo took out a $12.5 billion loan to help finance his takeover of twitter. he used his 16% stake in tesla as collateral, a company he founded and currently runs. what happens in the court case between mr musk and twitter in october could have a significant impact on tesla. joining me now is dan ives from wedbush securities. welcome to the programme. let's talk about that point, i would imagine many high up within tesla are not too happy about what elon musk has been up to lately with regards to bitcoin and twitter? it lately with regards to bitcoin and twitter?— lately with regards to bitcoin and twitter? it is a black eye for musk _ and twitter? it is a black eye for musk and _ and twitter? it is a black eye for musk and it _ and twitter? it is a black eye for musk and it has - and twitter? it is a black eye for musk and it has been - for musk and it has been overhanging the stock and this is at a time they are seeing headwinds in china given the zero covid issues, it's the last thought of that investors
needed and i think it's been anywhere between hundred and $25— hundred $50 overhanging the stock. the $25- hundred $50 overhanging the stock. ., , the stock. the money in the back for— the stock. the money in the back for tesla _ the stock. the money in the back for tesla could - the stock. the money in the back for tesla could be - the stock. the money in the back for tesla could be hit l back for tesla could be hit hard if he's got to buy twitter, so going forward, what do you think people will think? wejust have to do you think people will think? we just have to accept elon musk operates, he is this maverick that is hard to predict. i maverick that is hard to redict. ~ maverick that is hard to predict-— maverick that is hard to redict. ,, . , predict. i think that has been his history. _ predict. i think that has been his history. i _ predict. i think that has been his history, i do _ predict. i think that has been his history, i do think- predict. i think that has been his history, i do think it - predict. i think that has been his history, i do think it is . his history, i do think it is different, it has left a tar in terms of how he has handled this fiasco with twitter and more and more it feels like twitter has a significant iron fist upperhand, in terms of tesla, the fare ultimately is if musk has a massive task that he has to own twitter as a public company, he would have two sell more stock. but
public company, he would have two sell more stock.— two sell more stock. but in terms of — two sell more stock. but in terms of the _ two sell more stock. but in terms of the car _ two sell more stock. but in terms of the car company i terms of the car company itself, how it is doing, give us your take? we have had the latest results out. i us your take? we have had the latest results out.— latest results out. i would is a better than _ latest results out. i would is a better than feared. - latest results out. i would is a better than feared. if- latest results out. i would is a better than feared. if you | a better than feared. if you take out the china shutdown april and may, navigating better second—half reiterating that in terms of 50% growth, i think demand continues to outstrip supply and i think right now, tesla navigating into the second half, given the zero covid shutdowns in china, ripped the band—aid of and stocks would be up. but ripped the band-aid of and stocks would be up. but what about the _ stocks would be up. but what about the competition that i stocks would be up. but what about the competition that is| about the competition that is getting hotter and hotter all the time? the other car makers worldwide are coming out with their electric vehicles so of course tesla had first mover advantage and it's got this cult following but the competition is biting, isn't it now? ., , ., , competition is biting, isn't it now? ., , ., ., ., now? competitions come from all anules now? competitions come from all angles around _ now? competitions come from all angles around the _ now? competitions come from all
angles around the world - now? competitions come from all angles around the world and - now? competitions come from all angles around the world and the i angles around the world and the bull's—eye on the back in terms of tesla but in terms of leadership and just from a production perspective, right now it is still tesla's world and everybody else is paying rent in the ev space but around the corner no doubt competition is coming. that's why investors this year it has been a glass half empty view of tesla and china, that is the heart and lungs of the tesla story as we saw this quarter.— saw this quarter. ok, good to talk to you- — saw this quarter. ok, good to talk to you. thank _ saw this quarter. ok, good to talk to you. thank you - saw this quarter. ok, good to talk to you. thank you for - saw this quarter. ok, good to | talk to you. thank you for your time. rising fuel prices and growing environmental concerns are boosting demand for electric cars around the world. singapore has seen the number registered double in the first five months of the year. but they still make up just 10% of all new cars. derek cai reports from singapore. this is one of the most expensive places in the world to get a car. just about 10% of the population actually own one
copy a standard car like this in singapore can cost $100,000, thatis in singapore can cost $100,000, that is almost five times what it cost in the us or the uk and the reason for that is because of a government issued car permit which can cost two or three times more than the actual car itself. it is one of the resets that the government is using to limit the number of cars on the roads and despite that, the government has one new message. go electric. it is offering tax rebates for two years to people and companies buying electric cars. that is good news for this company that provides electric car rentals. business now is definitely at its best. the rising cost with the change in economic conditions and with the pandemic, people are a lot more conscious about the same pot of money that you have.— money that you have. jeremy is one of the _ money that you have. jeremy is one of the renters _ money that you have. jeremy is one of the renters stopping - money that you have. jeremy is one of the renters stopping the | one of the renters stopping the rise in petrol prices has convinced him to use his motorcycle less. he started renting electric cars during the pandemic, testing them out
before making any commitments. if i were to get my own vehicle, definitely considering an electric car rather than the traditional internal combustion engine type. there's a lot more awareness and discussions among my group of friends on electric vehicles, i have a couple of them who got electric vehicles themselves.— themselves. singapore is also encouraging _ themselves. singapore is also encouraging public _ themselves. singapore is also encouraging public transport, | encouraging public transport, such as taxi and bus companies to retire their diesel fleets. but going fully electric is really expensive, for now. the cost to produce _ really expensive, for now. the cost to produce a _ really expensive, for now. tie: cost to produce a battery really expensive, for now. tte: cost to produce a battery are coming down year on year and thatis coming down year on year and that is the biggest cost element of an electric vehicles are what we are seeing is about 2025, 2026, the cost to actually manufacture and ev will be the same if not less than an internal combustion engine. than an internal combustion enaine. ., than an internal combustion enaine. . ., , , engine. charging stations is another roadblock. - engine. charging stations is another roadblock. right i engine. charging stations is i another roadblock. right now there are about 2000 but the government wants 60,000 more by 2030. tt government wants 60,000 more by 2030. . ., ., ., 2030. if we average it out of every single month - 2030. if we average it out of every single month the - 2030. if we average it out of every single month the rest | 2030. if we average it out of. every single month the rest of the decade, we are talking
about 500 charging stations a month. it's a tall order but it should be possible. the ongoing su -l should be possible. the ongoing suoply chain _ should be possible. the ongoing supply chain shortage _ should be possible. the ongoing supply chain shortage could - supply chain shortage could delay this. singapore aims to only have green cars on its roads by 20a0 but with so many challenges, it may take a while before it can ride out the speed bumps. let's look at financial markets today which are kind of nervous, really. they are trading ahead of the european central bank decision, it is really weighing on markets, the concern that the eurozone is headed into recession this autumn. if we look at the next boards we see how wall street feared, of course wall street is reacting to the earnings stories, with mention tesla, our stack up stories, with mention tesla, ourstack up 1.5% on stories, with mention tesla, our stack up 1.5% on wednesday, —— nasdaq. the tech stocks are backin —— nasdaq. the tech stocks are back in favour on wall street. on the whole when it comes to 0n the whole when it comes to the earning stories, investors have been fairly comfortable.
so you are up—to—date on all things news, business and sport. have a lovely day and i will see you soon. hello. after that exceptional heat to start the week, for many of you, it was significantly cooler on wednesday compared with tuesday. tuesday, of course, we saw temperatures approach around a0 celsius in a number of spots. for some, it was actually 10—17 degrees cooler, but to put it into a bit of perspective, those temperatures still well above where we should be for ajuly afternoon. the exceptional heat had pushed a bit further eastwards, record—breaking heat in denmark. all that heat over the next couple of days pushes its way southwards and eastwards, and then into the weekend, we start to see it build once more in across parts of the uk. not, though, at the levels we've seen this week. as for thursday, as we start the day, it's going to be a largely dry day for many. there will be some rain around, and it's a bit cooler still compared with what we've experienced on wednesday. now, the drier weather comes courtesy of an area of high pressure trying to push in from the west. we've still got the legacy of a front sitting
across eastern areas. we saw a lot of humid air, temperatures still sitting in the mid if not high teens for one or two first thing thursday morning. fresher conditions in the west, but this is where we'll start with the best of the sunshine. northern ireland, wales, southwest england having a pretty decent day, just one or two showers around. sunny spells across scotland, a few showers for the mainland, but for the bulk of england, away from the southwest, lots of cloud, some outbreaks of rain and drizzle here and there, many will be dry. around the coast, it may be quite sunny. sunny too towards the channel islands, but a bit of a breeze blowing down through the likes of east anglia, and here, temperatures dropping back to normal. still a little bit above normal across the south, 2a—25 celsius. now, into thursday evening and through into friday, we'll start to see that cloud sit in place, but then a few more showers push their way northwards, the winds shifting direction slightly. it does mean temperatures still won't drop a huge amount, a cooler day — a cooler night — i should say, across eastern parts of the country, but still with temperatures in the mid—teens across the south. so, for friday, showers at a greater chance of seeing, particularly heavy ones across parts of wales, the midlands, maybe rumbling up into northern england, could see some flashes of lightning, rumbles of thunder as well.
some through the english channel, which could get close to the south coast and affect the channel islands for a time. only a few showers for scotland and northern ireland. all of us will see temperatures closer to thejuly norm, for one or two, a little bit below. as i said, heat builds back in this weekend, there will be rain at times in the north and west, still very little rain towards the south and east, and temperatures in the high 20s by sunday.
good morning, welcome to breakfast with naga munchetty and charlie stayt. 0ur headlines today — the uk's next prime minister — the final two candidates in the conservative leadership race, liz truss and rishi sunak, begin to set out their pitches to win over party members. as temperatures cool, families across the uk begin to deal with losing their homes in heatwave wildfires. did this week's heatwave add to the growing problem of food waste? after fridges failed in the hot temperatures, pictures emerged of empty shelves. why did it all have to be thrown away? i'll be finding out. coming together — the widows of roy castle and james brokenshire join forces
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