tv World Business Report BBC News July 27, 2022 5:30am-6:01am BST
this is bbc news with the latest business headlines for viewers in the uk and around the world. the imf predicts the uk economy is set for the slowest growth out of the g7 nations next year. all eyes on the us federal reserve as they are expected to ramp up interest rates again today to battle inflation. and as record numbers tune into to the women's euro football championship to see england book their place in the final, is the money keeping going?
hello and welcome to audiences in the uk and around the world. i'm victoria fritz. we start here in the uk, with warnings that the country is set for the slowest growth of the g7 nations next year. for context, the uk is not alone, the imf says the global economy will shrink for the first time since 2020, why? partly the pandemic, partly the warn in ukraine, but the risk of recession is rising, and the uk is vulnerable. here are the numbers. the imf has revised down its growth for next year, from 1.2% to just 0.5%. significantly behind the us and europe at over i%, and the globalfigure of 2.9% growth in 2023. so why would the uk fare comparatively worse? well part of the problem is the uk's reliance on fossil fuels, making up 76% of our energy mix,
compared tojust under 60% across the eu. let's listen to the imf�*s chief economist. the one thing that worries me more about the uk economy is that their inflation numbers seem to quite high, there are quite high gas prices and water prices in the economy so we are project patient prices are actually quite high for the uk, higher than for the uae or even the us. that would signal even further monetary policy tightening by the bank of england and that would also weigh down on growth going forward. now to help explain all this joining me now is craig erlam, senior market analyst at trading platform 0anda. looking at some of this, i'd just want to read out some of the comments here. "0verwhelmingly tilted to the downside". "extraordinarily uncertain". "stagflationary environment
akin to the 1970s." have you ever heard the imf so depressed? i haven't and that is quite worrying, there has been occasions but this is very bleak, there's no two ways about it. but it's also not entirely surprising that we are seeing these words come out. if we look at the bank of england even a few months ago, maybe earlier this year even, they were already talking about the uk falling into contraction, recession even because the impact of energy prices when the cap raises on top of everything else and that was before things got really significantly worse in terms of the situation in ukraine, the price at the pump and all the price at the pump and all the price pressures throughout the economy, it's almost the reason why it is taking its time a little bit in raising interest rates by 25 basis points in time because they think there are view seems to be that a recession is inevitable and thatis recession is inevitable and that is going to do a certain part of itsjob that is going to do a certain part of its job for them in terms of lowering demand,
raising unemployment slightly, creating some slack in the labour market so that they can almost afford to be patient. it is a very strained situation here in the uk right now and as the imf said, high inflation expected to peak above 11% this year is only going to compound those problems. i5 year is only going to compound those problems.— those problems. is the imf in the ballpark _ those problems. is the imf in the ballpark with _ those problems. is the imf in the ballpark with the - those problems. is the imf in the ballpark with the others l those problems. is the imf in| the ballpark with the others in terms of forecast? you mentioned the bank of england there but forecast can be notoriously pretty unreliable. they can and especially in such uncertain times. if you go back six months even, how many people are forecasting growth and inflation and interest rates like they were this year? the ceo ofjpmorgan said earlier this year there could be between five and seven interest rate hikes in the us this year, it is actually can be more like 3% or more than double what he was saying and at the time that was seen as a shocking forecast, so we can't be any make any two minds, it is an extremely difficult environment to be forecasting and so there is no certainty on this, a lot can change, there
are a lot of volatile factors at play that there is no also getting away from the fact that energy prices just are not going to get much lower for the foreseeable future and the price at the pump are not going to get that much lower for the foreseeable future and the uk is extremely sensitive to that, adding all the factors the uk is facing right now, the transition period as a result of brexit is one of those and the other factors as well that means the uk is simply more vulnerable at this point and that means a recession has seemed inevitable for a lot longer. seemed inevitable for a lot [on . er. ., seemed inevitable for a lot loner. ., , _ longer. that sounds deeply, dee -l longer. that sounds deeply, deeply depressing. - longer. that sounds deeply, deeply depressing. do - longer. that sounds deeply, deeply depressing. do you | longer. that sounds deeply, - deeply depressing. do you think there is anything that might improve things and what you make of this new anti—fragmentation tool for the ecb, is that going to do the job? ecb, is that going to do the “ob? ., , ., , ~ job? to be honest, i think the thing that— job? to be honest, i think the thing that is — job? to be honest, i think the thing that is ultimately - job? to be honest, i think the thing that is ultimately going | thing that is ultimately going to change things and i think that thing we always have to remember when we are using the our word is that not all recessions are equal. a recessions are equal. a recession is two consecutive quarters of minus .i% growth which most people wouldn't notice stopping the us could
fall into a recession later this year, we will see how the data is on thursday so we don't want to get overly carried away with the recession thank. the most important thing right now that central banks can do is impact the inflation because thatis impact the inflation because that is what is driving a lot of the misery we are seeing right now and a lot of these forecasts are. of central banks can get to grips with inflation in the short term then that is the biggest impact we will see on the economy going into 2023— 2024 and alleviate some of the economic concerns and lead to slightly improved forecast but again, there are so many volatile factors in the area and i think that central bank is going to be called players which will allow policymakers to take a more proactive approach to trying to alleviate some of those pressures without worrying about inflation because as we have seen so often in the leadership debates this week, the two candidates are constantly talking about the way of the trade—off between wanting to make people's lives easier but we don't want to turn that 11%
inflation into 15% inflation, 20%, which is always the concern in these situations. we are auoin concern in these situations. we are going to — concern in these situations. we are going to leave it there for the moment, thank you very much. craig was just talking about monetary policy, all eyes are going to be on the us today. the uk wasnt the only recipient of bad news ahead, the us received the steepest downgrade of any country for this year. driven by those high costs of living we've been discussing, the imf have cut its growth forecast for the world's largest economy to 2.3% this year, down from 3.7% previously forecast, and to just i% in 2023. to combat those high prices america's central bank has been raising rates since march and will likely do so again later today. as samira hussain reports. in the united states, the cost of living has had the highest level in more than 40 years. everything is more expensive. in the last year the cost of
fruit and vegetables is that more than today a pound of beef is $5. last year it was $4.40. the price of petrol has skyrocketed by 60%. and this is not a uniquely american problem. prices are soaring around the world. the federal reserve, like other central banks, is raising rates to curb inflation stopping here on wall street, most people believe the policymakers will raise rates by 0.75% there are those who believe the fed may adopt a more aggressive policy and raise rates by a full percentage point, such as the urgency of combating rising costs. is the international monetary fund examined the outlook for global growth, it leaves bringing down inflation is top priority. leaves bringing down inflation is ton priority-— is top priority. central banks need to stay _ is top priority. central banks need to stay the _ is top priority. central banks need to stay the course - is top priority. central banks need to stay the course and| need to stay the course and bring — need to stay the course and bring inflation back. do need to stay the course and
bring inflation back.- bring inflation back. do you think the — bring inflation back. do you think the united _ bring inflation back. do you think the united states - bring inflation back. do youj think the united states was late to the game in terms of recognising how persistent patient is and in raising interest rates? i patient is and in raising interest rates?- interest rates? i think everyone _ interest rates? i think everyone was late - interest rates? i think everyone was late to l interest rates? i think i everyone was late to the interest rates? i think - everyone was late to the game. we were — everyone was late to the game. we were expecting inflation to be we were expecting inflation to he more — we were expecting inflation to be more of a short lived problem then it proved to be. what — problem then it proved to be. what we _ problem then it proved to be. what we realised is that the combination of fact as has been the perfect storm for inflation. supply disruption, strong — inflation. supply disruption, strong demand and energy prices, _ strong demand and energy prices, all of those things are pushing — prices, all of those things are pushing inflation outside of the comfort zone.— pushing inflation outside of the comfort zone. that is what the comfort zone. that is what the federal — the comfort zone. that is what the federal reserve _ the comfort zone. that is what the federal reserve will- the comfort zone. that is what the federal reserve will try i the comfort zone. that is what the federal reserve will try to | the federal reserve will try to do, get inflation back into the comfort zone. while 2% may be the goal it could take a while to get there. chris campbelljoins us, chris is a former us assistant treasury secretary for financial institutions, and now chief strategist at the risk consultants kroll. thanks very much forjoining me
stopping millions of americans are living on the edge, amid historically high inflation at the grocery store, the petrol pump, what can they expect in the months ahead? unfortunately there is not _ the months ahead? unfortunately there is not a _ the months ahead? unfortunately there is not a lot _ the months ahead? unfortunately there is not a lot of _ the months ahead? unfortunately there is not a lot of good - the months ahead? unfortunately there is not a lot of good news . there is not a lot of good news coming, and inflation continues to be quite high and looks like it may be continuing to rise and so i'm sure you're question is going to be what is the federal reserve and policy makers going to do in the united states to get is under control and there is just not a lot they can do. a lot is outside their control, the federal reserve of course will raise rates later today, but really the long answer to your short question is just there is a lot of pain coming to american consumers in the short and mid—term. i american consumers in the short and mid-term.— and mid-term. i will ask a variation _ and mid-term. i will ask a variation of _ and mid-term. i will ask a variation of the _ and mid-term. i will ask a variation of the question l and mid-term. i will ask a i variation of the question you just raised. can the fed do this? raise rates to boost
suoply, this? raise rates to boost supply, reduce demand and moderate prices without plunging the economy into recession?— plunging the economy into recession? ~ ., recession? think that book has already been — recession? think that book has already been written. - recession? think that book has already been written. likely . recession? think that book hasj already been written. likely we are going to be and a recession stopping now the question is can the federal reserve turn things around because what no—one wants to have in the united states is for us to go into a state inflationary environment where the economy is sluggish and has low or no growth and inflation continues to rise. that is a recipe for disaster both here in the united states and around the world so the federal reserve needs to get its arms wrapped around inflation and i believe they will do so later today by raising rates by perhaps one or above i%. raising rates by perhaps one or above 196. �* , raising rates by perhaps one or above 196-— above 196. i'm 'ust wondering, is it the above 196. i'm just wondering, is it the quantum _ above 196. i'm just wondering, is it the quantum of— above 196. i'm just wondering, is it the quantum of rate - above 196. i'm just wondering, is it the quantum of rate risesj is it the quantum of rate rises thatis is it the quantum of rate rises that is going to affect pricing pressures, or is that the amount per se? is1% of the
magic number or is it the number of rate rises that are going to happen over time that might actually change things around? �* . ., might actually change things around? �* .. .., , around? the american consumer is, we around? the american consumer is. we are _ around? the american consumer is. we are proving _ around? the american consumer is, we are proving right - around? the american consumer is, we are proving right now- is, we are proving right now just how powerful they are and just how powerful they are and just how powerful they are and just how much they like to spend, even though consumer credit cards are more expensive and everything is more expensive, the cost of capital is more expensive. the consumer continues to spend stopping there was a bit of a spin through challenge we had which was people still have money in their savings accounts and their savings accounts and their bank accounts, as that money continues to trickle out of their bank accounts and prices continue to rise, that spending will dramatically slow down. we see it with businesses in the united states and american consumers continue to defy gravity, so as interest rates come up, some of it is psychological, some of it is pure economics, the ability to
afford items, that equation will balance and really no—one knows the magic number, of course the federal reserve is going to do its best to guess what that magic number is but we not there yet and the federal reserve will continue raising rates in order to find that balance of where the american consumer pulls back a bit and start to get their prices under control. ﬁk bit and start to get their prices under control. 0k chris, thanks very — prices under control. 0k chris, thanks very much. _ prices under control. 0k chris, thanks very much. chris - prices under control. 0k chris, | thanks very much. chris kimball there. rates arent the only thing on investors minds. its earnings season for big tech, and the latest to post is google's parent company alphabet. who, although showing a slip in revenue, came close enough to expectations to send share prices up. and this is where size matters, the world's biggest retailer of online advertising is likely to withstand the global economic headwinds far better than its smaller rivals. joining me now is liam patterson, founder and ceo of bid—namic.
they help other people place ads on google. snap and twitter reporting weaker than expected earnings last week. microsoft on tuesday also said it had taken a $100m hit from lower ad spending on its linkedin platform. how much pressure are you seeing in the advertising market? like you said it has been a breathe out or sigh of relief on wall street with the results from google, and we are really seeing that actually retailers which have grown in their most recent results by i4% have got the products, they have got the stock and they are really keen to use google ads which are a very important channel for direct selling, so unlike other channels like tv, radio and other media methods, such as social media, google is very direct and they got a really core business which is very
strong at driving those results and profitability for advertisers, so we are actually seeing retailers pushing more spend into the channel which is seenin spend into the channel which is seen in those results as well. that makes sense in terms of resilience. a british advertising business have been talking up the industry and saying look, we are still expecting 8% growth on last year. are the pundits overly negative do you think when it comes to advertising? i negative do you think when it comes to advertising?- comes to advertising? i think so but equally _ comes to advertising? i think so but equally there - comes to advertising? i think so but equally there is - comes to advertising? i think so but equally there is a - comes to advertising? i think so but equally there is a lot l so but equally there is a lot of pressures on retailers, on advertisers like chris was just mentioning there. inflation is a real challenge. also currencies. alphabet are reporting us dollars but actually the us dollar being so strong is lowering some of their, they are overreporting on that side of things but there is definitely a real demand but there's a lot of challenges around the supply chain, around procurement and inflation of raw materials which make the core products
that we buy so there is a real pressure on margins for retailers and for those advertisers which just means that they are under pressure when they are coming to run these and so they really need to be very, very efficient in how they are doing that but luckily for google they are in a resilient position. they do have such reach with customers and such strong results in terms of people actively going to google to search and by what they are shopping for, as opposed to other media channels so i think that we are still going to see growth within google's core business of google's core business of google ads as we have seen in this reporting period but yeah, there's definitely challenges and those wider economic challenges on customers having to cut back, impact of inflation and the impact of rising costs as well on products. rising costs as well on products-— rising costs as well on roducts. �* ., ., products. 0k, we're going to leave it there, _ products. ok, we're going to leave it there, thank- products. 0k, we're going to leave it there, thank you. . stay with us on bbc news, still to come: we take a look a look at the business behind women's football as england book their place in the euro championship final.
cheering. the us space agency, nasa, has ordered an investigation, after confirmation today that astronauts were cleared to fly while drunk. the last foot patrol in south armagh, once an everyday part of the soldier's lot, drudgery and danger, now no more after almost four decades. if one is on one's own, - in a private house, not doing any harm to anyone, i don't. really see why all these people should wander in and say, - "you're doing something wrong". six rare white lion cubs on the prowl at a worcestershire wildlife park, and have already been met with a roar of approval from visitors. they are lovely and sweet,
yeah, they're cute. this is bbc world news, the latest headlines. in the next few hours, a coordination centre for ukrainian grain exports will open in turkey as part of the un—brokered deal to get supplies moving. parts of europe impose restrictions as they battle water shortages after a heatwave and subsequent drought. here in the uk, there's severe travel disruption again today, as 40,000 rail workers take further strike action in a continuing dispute over pay, jobs and working conditions. only 20% of rail services are set to run today but even these services will be limited and shortened. 0ur transport correspondent katy austin reports. much of the railway has come to a halt as members of the union walkout again. these passages
at preston yesterday had heard disruption was on the way. irate disruption was on the way. we did have disruption was on the way. - did have things planned with the strike going on we won't be able to go anywhere needing the train. we will be spoken but we are staying local. i train. we will be spoken but we are staying local.— are staying local. i understand wh the are staying local. i understand why they are _ are staying local. i understand why they are striking - are staying local. i understand why they are striking i - are staying local. i understand why they are striking i support them — why they are striking i support them. the money that they want thrat's— them. the money that they want that's fair— them. the money that they want that's fair enough. it them. the money that they want that's fair enough.— that's fair enough. it 'ust means a i that's fair enough. it 'ust means a little * that's fair enough. it just - means a little inconvenience. as with — means a little inconvenience. as with the _ means a little inconvenience. as with the first _ means a little inconvenience. as with the first of _ means a little inconvenience. as with the first of these - as with the first of these strikes injune half the network is closed, some places have no trains. 20% of services will run and they. at half past six this evening, last trains on some long distance routes will depart early in the afternoon. a section of the workforce striking effects 4,000 trains,. they can only control and look after skeleton service today which is why we have so few trains running stop those
trains running stop those trains will be finishing a lot earlier than normal. the last train out of here to liverpool is three o'clock tomorrow afternoon if you are thinking of travelling by train today check before you travel. many commuters — check before you travel. many commuters can _ check before you travel. many commuters can work- check before you travel. many commuters can work by - check before you travel. many commuters can work by home j check before you travel. many - commuters can work by home but lots ofjourneys commuters can work by home but lots of journeys will commuters can work by home but lots ofjourneys will be affected including some summer holiday trips and get into the second women's euro semi final tonight in milton keynes. a deal in the ongoing dispute feels far away at the moment. the union says it will continue to talk but huge chasm continued between them and employers on paid job security and working conditions. it has scheduled more strikes for 18th and 20th of august. it said it was its only option in a cost of living crisis.— of living crisis. we haven't rushed into _ of living crisis. we haven't rushed into this, - of living crisis. we haven't rushed into this, seeking l of living crisis. we haven't| rushed into this, seeking a settlement for two years in the industry. we don't want to inflict massive destruction on ordinary people going about their lives but we have nowhere else to go.
their lives but we have nowhere else to go-_ else to go. the rail industry is under _ else to go. the rail industry is under pressure _ else to go. the rail industry is under pressure to - else to go. the rail industry is under pressure to save i else to go. the rail industry - is under pressure to save money after the impact of the pandemic, bosses argue modernisation is needed in reforms must happen to afford higher pay without passengers or taxpayers having to pay more. grant shapps accused union leaders of trying to create as much disruption as possible and urged them to step up possible and urged them to step up from action and risk people turning their backs on the railway forgot. for now people are being told don't take the journey unless it is absolutely necessary. to football now and thousands of fans in england will be waking up happy today as their team has made it through to the final of the women's euros championship after beating sweden last night. a resounding victory for the host nation, 4 goals to 0, also represents a big win for the women's game.
the tournament was watched by thousands in the stadiums but millions around the world, and millions more expected to tune in tonight for the other semi final between france and germany. lisa parfitt is the co—founder of the sports agency the space between and director of women in football. is this tournament changing the women's game? undoubtedly. there is huge objectives for the success of this tournament and already it's having enormous strides, commercially it's got to be one of the most successful women's tournaments of all time, with 13 global parties, five local partners, the audiences as you mentioned in your introduction, have all smashed the records for attendance, and the stadium and the broadcast numbers are increasing match by match and we are excited to find out what the numbers were last night, already looking like another record—breaking night for women's football in this country.
you've done some research into the inclinations and purchasing power of the women's football fan. tell us what you've found. it was really interesting, we did some research to compare the difference between bands of means football and fans of women's sport and those audience are equally split between then and women. what we found with women's sport as they were far more likely to advocate and purchase brand sponsored of the women's sports that they follow because they understand the value that the sponsors are bringing. for such a long time woman sport hasn't had the support of commercial partners and investment it requires, so they understand what the sponsors are bringing and how important they are, so the value for those sponsors and brands coming into women sport is absolutely enormous and there's a great for them.
is it possible to convert this insight into investment to close the gap between the men and women's game? and aspects like pay. it all contributes _ and aspects like pay. it all contributes towards - and aspects like pay. it all contributes towards that i contributes towards that ultimately commercial success of women's sport will mean success on the pitch, success when it comes to the grassroots participation, when it comes to opportunities, for people to get involved in the women's game and ultimately it will contribute to the commercial success and the pay that is received by women playing the games as well. irate received by women playing the games as well.— received by women playing the games as well. we will leave it there. games as well. we will leave it there- some — games as well. we will leave it there. some breaking - games as well. we will leave it there. some breaking news. i there. some breaking news. bangladesh has now officially gone to the imf requesting a bailout. costly oil is eating into foreign exchange reserves into foreign exchange reserves in the finance minister looking to start the formal negotiation for loans to help the country with its budgeting and balance of payment requirements. this news just
of payment requirements. this newsjust coming in in of payment requirements. this news just coming in in the last few minutes. you can always reach me on twitter. back with your headlines in five minutes. hello there. it felt rather cool for the time of year on tuesday across much of the country, particularly in the north and the west, where we also had one or two heavy showers around. but high pressure dominates the scene, as well, as we head into wednesday, but its centre will be pushing towards the east of the country — and that means gradually, we'll start to import air from the south. always a slightly warmer direction, so it'll feel a touch warmer i think across the country on wednesday. we start off dry and sunny, but through the afternoon, cloud will tend to build, many places will turn quite grey, and we could see a few showers sparking off, particularly northern england in towards scotland. temperatures a bit higher — 19—20 celsius in the north, and around 20—23 celsius across england and wales, and winds will remain light. now through wednesday night, we continue with this slightly warmer southerly airflow. quite a bit of cloud around, some splashes of rain
here and there, particularly through central areas. and temperatures no lower than around 13—15 celsius in the south, still a few cooler spots in the north. so, it is warming up as we end the week. for all areas, but in particularfor england and wales, it won't be wall—to—wall sunshine, there will be quite a bit of cloud around, and also some showers again, affecting more northern and western areas. thursday, our area of high pressure is very weak, out towards the north sea, bringing south southeasterly winds — these weather fronts slowly encroaching into the far west of the country later in the day. so, it'll going to be a pretty benign day, light winds, variable clouds, some sunshine around — the best of the sunshine across central and southern areas, thicker cloud across northern england and scotland, where we could see some splashes of rain here or there. but it'll feel warmer, up to 21 celsius in the central belt of scotland, maybe 24—25 celsius across the southeast.
similar story on friday — probably a chance of seeing some showery rain through central and northern parts. best of the sunshine in the south with the highest temperatures. but we'll start to see these weather fronts encroaching into the west of scotland, northern ireland later in the day. again, a warm day — up to 22 celsius in scotland, perhaps up to 27—28 in the southeast. beyond friday into the weekend, it looks like low pressure could bring more substantial rain to the north and the west of the country. very little rainfall getting into the southeast, where we really do need it. so, it'll stay quite warm into the weekend, though, with low pressure nearby, certainly to the north, we're likely see the rain here, and there will be quite a bit of cloud around at times, too.
good morning, welcome to breakfast with sally nugent and jon kay. 0ur headlines today. commentator: fran kirby goes for the chip. england's lionesses roar into the final of the euros to the delight of fans. i thought, "oh my, this is going to be hard." and then, bam, 4—0. it was a great game, though — great game. after a thrilling night in sheffield, england will look to