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tv   World Business Report  BBC News  August 10, 2022 5:30am-6:01am BST

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this is bbc news with the latest business headlines for viewers in the uk and around the world. is us inflation about to peak? markets are priming themselves for the latest data released today, soaring bills and winter blackouts — the uk faces a worsening energy crisis. coalfrom russia is banned from today in the eu — how will it affect countries like germany that depend on it? and a steely resolve — the boss of one of south africa's biggest iron companies tells us how she navigates the challenges of today's business environment.
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global markets are eagerly waiting for the latest us inflation numbers and whether they will give any indication the rate has peaked. last week there was unexpectedly strong us jobs data which added to expectations the world's biggest economy is able to withstand a sharp interest rate rise by the federal reserve. but if inflation continues to soar it could change the likelihood of an aggressive big hike by the central bank. here's our north america business correspondent michelle fleury. after yea rs of no after years of no or at least hardly any inflation in the us, the past 12 months have seen consumer prices bugging sharply. the annual headline rate was 9.1%, the highest level for a0 years. economies
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expect the rate to call slightly to 8.7%. if that is the case that was ignored some welcome relief for us consumers and there are signs that americans do not expect inflation to continue at these levels for long. in addition, congress is about to pass the inflation reduction act which at least for a short time should ease pressure on prices. the president has been keen to talk up the help to consumers and the new investments in green energy and healthcare will bring. £31 green energy and healthcare will bring-— will bring. of us will not see this kick _ will bring. of us will not see this kick in _ will bring. of us will not see this kick in for _ will bring. of us will not see this kick in for a _ will bring. of us will not see this kick in for a little - will bring. of us will not see this kick in for a little bit - this kick in for a little bit but it is all good. it will lower, when you sit down at the electricity table at the end of the month, there will be more from your bills.— from your bills. the cheerleading - from your bills. the cheerleading aside, from your bills. the l cheerleading aside, if from your bills. the - cheerleading aside, if you from your bills. the cheerleading aside, if you take out energy and food from the consumer price index so—called core inflation is probably still on the rise and america's battle with the rise of living is still far from over.
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joining me now from new york is dan katz, co—founder and portfolio manager at amberwave partners. hello to you. has inflation peaked in the us or is it still a toughjourney i had? i peaked in the us or is it still a tough journey i had? a tough “ourney i had? i think the ke a toughjourney i had? i think the key question _ a toughjourney i had? i think the key question is _ a toughjourney i had? i think the key question is what - a toughjourney i had? i think the key question is what you | the key question is what you touched on just earlier, the key question is what you touched onjust earlier, which is the difference between so—called headline inflation and so—called core inflation. we expect there headline inflation number to head down a bit from where it was injuly and the release. when the data comes out in just a few hours here. but the core number, we actually do expect to remain elevated potentially from where it was injuly... elevated potentially from where it was in july. . ._ it was in july. .. before you go further, please _ it was in july. .. before you go further, please clarify - it was in july. .. before you go further, please clarify when . further, please clarify when you say core number, is that the number that does not include energy and food and how
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does that work? that include energy and food and how does that work?— does that work? that is exactly ri . ht. does that work? that is exactly right- when — does that work? that is exactly right- when i — does that work? that is exactly right. when i say _ does that work? that is exactly right. when i say and _ does that work? that is exactly right. when i say and talk - right. when i say and talk about the importance of core inflation when economists talk about this, it is important to remember that we are not trying to minimise the impact of headline inflation because the headline inflation because the headline inflation because the headline inflation is really how most families actually do experience inflation because of how much food and energy costs make up of the average household budget. unfortunately, household budget. u nfortu nately, we household budget. unfortunately, we seem to have lost the line... let's just persevere, can you hear us? you whether frozen chosen! carry on, you are explaining why four families in the us, energy and food costs are important, despite the fact you are saying core inflation number is what we're looking at today? that is exactly right- _ we're looking at today? that is exactly right. headline - exactly right. headline inflation is so important and thatis
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inflation is so important and that is why you have seen consumer surveys of the economy be so weak because people are struggling so much with the headline inflation. when it comes to what the federal reserve is looking at the implications for monitoring policy and markets, it's more the core number and our in—house economic team is really looking towards core inflation not to be coming down from previous numbers and to remain strong and possibly be accelerating. that is really because of housing. it's important to remember in the housing inflation numbers, most people are on 12 month leases so at any given month it is really only less than 10% of individuals who are experiencing a big price bump. as a result of that, housing inflation takes a while to filter through to the numbers, and that is what we really see as powering the core inflation numbers. latertoday,
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as powering the core inflation numbers. later today, when the data comes out and for many months to come.— data comes out and for many months to come. thank you so much for _ months to come. thank you so much for staying _ months to come. thank you so much for staying up _ months to come. thank you so much for staying up for - months to come. thank you so much for staying up for us - months to come. thank you so much for staying up for us in l much for staying up for us in new york and sharing your expertise! as it is a get the numbers from the us, we will let you know and explain what they mean. just when you thought it could not get any worse, along comes and other forecast on uk energy bills. the latest from comparison site uswitch warns many households are already falling behind on energy payments with total debt owed three times higher than a year ago. the consultancy cornwall insight predicts bills could hit over £a,200 by next january. which would mean the average household would be paying around £355 a month, instead of £16a a month currently. a year to help households but campaigners argue it needs the government is providing around £a00 a year to help households but campaigners argue it needs to put extra emergency measures in place well before september
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5, when the new prime minister takes over — still a weeks away. our business editor simonjack has this report. i spoke to suzanne in february this year. back then on maternity leave, she was worried about average energy bills rising to almost £2000 in april and now it is estimated that come january they'll be double that. how did you feel now? it double that. how did you feel now? , , . . , double that. how did you feel now? , , , , now? it is scary. it is my biggest _ now? it is scary. it is my biggest concern - now? it is scary. it is my biggest concern as - now? it is scary. it is my biggest concern as a - now? it is scary. it is my - biggest concern as a mother, to be honest, financial security and making sure that everybody can have what they need. i think the uncertainty around it and a rise in october and a rise injanuary, that is where it really makes me nervous. the amount energy _ it really makes me nervous. the amount energy companies are allowed to charge a household, the price, has rocketed in 18 months partly because of surge in energy demand after cobit exacerbated by fears that russian gas supplies will either be shunned or shut off
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and experts now estimate the price could estimate three point £5,000 per year in october are more than a200 by 0ctober are more than a200 by january. that is hundreds of pounds more than estimates from just last week as wholesale prices have remained high and the method of setting the cap has changed. another grim estimate is that these prices are not a one off. to estimate is that these prices are not a one off.— are not a one off. to be honest. _ are not a one off. to be honest, whether - are not a one off. to be honest, whether it - are not a one off. to be honest, whether it is i are not a one off. to be i honest, whether it is three point 5000, a000, 5000, they are all dreadful numbers. the point we want to make is that is we see this carrying on, not just with winter coming but the winter after data may be the winter after data may be the winter after data may be the winter after that. this is a long—term structural change in european energy. long-term structural change in european energy.— european energy. energy charities _ european energy. energy charities are _ european energy. energy charities are warning - european energy. energy charities are warning of. european energy. energy - charities are warning of grave circumstances for the finances and health of vulnerable consumers this winter, and say more assistance from government is urgently needed.— is urgently needed. people on the lowest _
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is urgently needed. people on the lowest incomes _ is urgently needed. people on the lowest incomes in - is urgently needed. people on the lowest incomes in the - is urgently needed. people on | the lowest incomes in the most vulnerable circumstances, government has to get money in their pockets are off their bills and do it now. 0therwise bills and do it now. otherwise we will have situations of debt thatis we will have situations of debt that is impossible to repay, supplies going out of business, households unable to be able to afford the basics. it is not about choice it is about when you do it and the earlier you do it, the more people you save. 1 . ~' do it, the more people you save. 1, . ~ do it, the more people you save. ., save. back in may that then chancellor, _ save. back in may that then chancellor, rishi _ save. back in may that then chancellor, rishi sunak, . chancellor, rishi sunak, announced a support package of more than £50 billion when 0ctober prices are expected to hit £2800. if these estimates prove right and the support keeps up with them, it will cost many billions more. how to do that will be the decision for the next prime minister and chancellor. to talk through these issues, i'm joined byjanet mui, head of market analysis at brewin dolphin. good morning. this is a story about the uk in particular but actually many countries, many households across europe and
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elsewhere are facing similar challenges, aren't they? good morning- _ challenges, aren't they? good morning. thank _ challenges, aren't they? good morning. thank you _ challenges, aren't they? good morning. thank you for - challenges, aren't they? goodi morning. thank you for having me. absolutely. what we're talking about is a global rising energy prices, whether you're talking about oil or national gas, in europe we confronted with a very volatile gas price because we are in more proximity to russia and continental europe is heavily reliant on russian gas but not so much in the uk, only a% comes from russia. all of these prices are affected by international markets and are such a demanding competition for gas around the world at the moment because russia is withholding the gas supply and if you look at the inflation numbers, more than half of that is driven by energy prices so a very serious situation.- very serious situation. series consents _ very serious situation. series consents for _ very serious situation. series consents for the _ very serious situation. series consents for the uk - very serious situation. series consents for the uk and - very serious situation. series i consents for the uk and europe and the us. just talking about the inflation numbers out of there today, and the pressure is on the government to do more
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now —— serious concerns. there could be a cut in the levy, but i think it is very
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important to have more clarity for now because it affects confidence. it affects spending behaviour, and that could really push is even closer into a recession. thank you very much, good to talk to you today. as we have said, the uk isn't the only country grappling with the crisis. the european union is usually dependent on russian energy, as janet pointed out. from today, a ban on coal imports comes into force. before the war in ukraine, 50% of the goalfor germany's before the war in ukraine, 50% of the goal for germany's power stations was imported from russia, and germany represented a6% of the total brown colt consumption of the eu in 2021, so how will the eu more specifically germany — the biggest economy in the bloc — cope without russian call? joining me now is alex bethe, chairman of the german coal importers association vdki.
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is germany ready to do that coal from is germany ready to do that coalfrom russia? coal from russia? good coalfrom russia? good morning from berlin, yes, we are ready for that switch from russian coal to other sources. we have the view that russian coal can be replaced. replaced with what? we are replacing it predominantly web coal from the united states, south africa, australia, colombia and indonesia. how does it work practically, because to get into germany, using ports and etc, is that tricky issue? of course, you need more of a of course, you need more of a plan, of course the shipping
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periods from south africa, for two weeks, australia and indonesia, seven weeks. colombia, three weeks compared to only four days or one week from a russian port or a northern seaport, from murmansk. how is germany coping with the cost of coal? it has significantly risen like many other sources of energy. correct, correct, but in the end we have rising energy prices already prior to february this year coming out, with the world economy coming out of covid, but of course is the ukraine crisis these prices have increased significantly. but a megawatt hour produced of coal is only half the price compared to what is produced out of mr putin's as at the moment. out of mr putin's as at the moment-— out of mr putin's as at the moment. ., _, . ., i. moment. how concerned are you for the outlook _ moment. how concerned are you for the outlook of _ moment. how concerned are you for the outlook of the _ moment. how concerned are you for the outlook of the german . for the outlook of the german economy given the challenges? we're talking about coal now
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but also provision of gas from russia, still heavily reliant on russia for gas, and we're coming into the autumn winter months. , , months. yes, maybe in winter it will be a real— months. yes, maybe in winter it will be a real challenge, - months. yes, maybe in winter it will be a real challenge, for - will be a real challenge, for all western economies in europe, but in terms of coal, we are confident that we can replace the russian coal with other sources. we appreciate you joining us alive from berlin. good to talk to you. stay with us on bbc news, still to come: a steely resolve. the boss of one of south africa's biggest iron companies tells us how she navigates the challenges of today's business environment. the big crowds became bigger as the time of
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the funeral approached. as the lines of fans became longer, the police prepared for a hugejob of crowd control. idi amin, uganda's brutal former dictator, has died at the age of 80. he's been buried in saudi arabia where he lived in exile since being overthrown in 1979. two billion people around i the world have seen the last total eclipse of the sun to - take place in this millennium. it began itsjourney off the coast of canada, . ending three hours later, when the sun set over. the bay of bengal.
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this is bbc world news, the latest headlines: senior republicans have condemned the unprecedented search of donald trump's mar—a—lago home. the white house insists it only learned of the fbi's action from media reports. moscow has played down a series of explosions which have shaken a russian military airfield in western crimea. president zelensky is predicting ukraine will eventually recapture the peninsula. now to south africa where mpumi zikalala is one of the most powerful people in mining. as the boss of kumba iron ore, part of the giant anglo—american mining group, she oversees thousands of employees delivering steel to critical industries. and it's those employees mpumi says are the main inspiration for her in navigating the challenges of today's business environment. answers don't just
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answers don'tjust lie with one person, they lie with different people. asa as a university student are used to work in the mines during the vacations and then when i finished ijoined initially as a engineer, and i guess the rest is history. when i started, what got me excited was the fact that engineering was the fact that engineering was tough and it solved problems, etc. when we went through the global economic crisis at the end of 2008, diamond prices, we couldn't really afford the salaries we were paying people. until then, i still believe the answer is still had to come from within. but when we were sitting around the table, having to come up with solutions that were going
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to sustain our business beyond the global economic crisis when i was general manager i all of a sudden saw the various members of my team and others in the organisation coming up with different answers. and i then got the lightbulb moment that one, you know what? the answers don't sit with one single person, the answers sit with the 1a,000 men and women that work for our business. if you can actually inspire those people to give their best, then you will find the answers, and thatis you will find the answers, and that is why, for me, i go back to it. people are the business. i have to agree! due to the soaring cost of basic goods many of us around the world are already counting the pennies and recession is on the horizon in the latter part of this year will going on holiday become a luxury? that is something my next guest needs to consider. the global hotel search platform trivago has released its latest quarterly results, posting a 52% increase in revenue year—on—year. but in a letter to shareholders
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the company is warning that although they are witnessing a sharp rebound in travel activity, they are preparing for an economic slowdown, and they expect inflation to have an impact on the travel market in the second half of the year and beyond. so let's talk to the boss, axel hefer, chief executive of trivago. good to talk to you again. things have got a lot better for you. we have talked about those pandemic, out of it has been for your industry. talkers through the rebound and how you are able to respond quickly. we had a very _ are able to respond quickly. - had a very interesting point in time. we had to cut back on our travel activities over the last couple of years, and there were some things we wanted to do, so the rebound has been very sharp. but as you said, we think inflation will actually lead to lower travel activity
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in the months to come. adding to that, we obviously have the worries about inflation. the less money we have to spend on things like holidays, but also just a hassle, watching people travel around the world the summer, it hasn't been fun, has it? that is obviously coming on top. there are labour shortages in all sectors, but the hospitality and travel industry has been hit worst, i would say, because peoplejust moved out of the sector. and also you see those charges everywhere. it is expensive, it has been disrupted. you have too few people serving the industry and disposable incomes that adds to pleasure. we do think travel activity will come down, but people also need to save money and that is what we are providing, we are helping people compare prices so we are positive in providing value to the travellers, but the overall volume is likely to come down.
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you just talked i was through how you are going to sell yourself through this next period of time which is going to be tough for your industry, in essence that you will provide a means for us to find the best deal when we travel, but for you in terms of how you make money, remind us of how that works? and going forward in a time a possible recession and less travel, how you will navigate that. we just offer service, transparency, so we help you to navigate through hundreds of different offers on the web, and then we basically make money if you then visit one of the online travel agencies, websites directly. so your income depends on people travelling? yes, on people travelling but the other valley that we provide compared to our competitors is this is a time
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when you want to compare more prices. in times when you don't care about how much you pay that much, i mean, comparing prices as less useful than when you actually care a lot about prices, so that is why i am... we are slightly on the positive side, looking into the future, but the overall travel activity is likely to come under pressure. is likely to come under pressure-— is likely to come under ressure. ., , ., pressure. in general, your industry _ pressure. in general, your industry has _ pressure. in general, your industry has been - pressure. in general, your industry has been throughi pressure. in general, your- industry has been through such a vehicle few years and that will carry on. the summer has been really huge in demand, but that has presented some challenges. do you think we will see more fallout? more companies going under in the travel sector? i don't think so, i would be more optimistic. what you can clearly see right now in the travel industry but also in the world overall is that a lot of the systems are out of equilibrium. also, you have too much demand for the supply. they are not enough people
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serving travellers, and there is a definite demand which is also a benefit, it is helping the overall economy to come into balance again, and if that happens from time to time i think that is also something positive. think that is also something ositive. ~ ., positive. we will end on the ositive positive. we will end on the positive note. _ positive. we will end on the positive note. thank - positive. we will end on the positive note. thank you . positive. we will end on thei positive note. thank you for talking to us again. chief executive of trivago, axel hefer. let's have a look at the markets. people are waiting for the numbers to be released. we had a day of negativity following what happened on wall street the night before. the consumer and express report will be released when markets open in the us. it will give us an indication as to what will happen when interest rates and at the us, good, and the dollar strengthening further. it is pretty steady today. let's look at the exporter, this is how the day ended on wall street. it was a negative end. you are
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up—to—date on all things business. thanks, have a lovely day. see you soon. hello. 0ur spell of largely dry and increasingly hot weather is set to continue for the rest of this week. over the next few days, we see those heatwave conditions building and hardly any rain in the forecast. just the far north—west of scotland, where we see a weather front close by, we see a little bit of rain, but for the rest of us, high pressure dominates. as that high pressure shifts its way slightly more towards the east, that will draw in this really hot air from the near continent, so particularly by the time we get to thursday and friday, we'll see those temperatures soaring, particularly across a good part of england and wales. but temperatures to start your wednesday morning between about 11 to 15 in our towns and cities, a touch lower in the countryside first thing. lots of hot sunshine on the cards for wednesday, that weather front bringing a bit more cloud to the far north—west, bit of rain for the western isles, perhaps.
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but temperatures in england, scotland and northern ireland in the mid—20s, but down towards the south and south—east, 30, 31 degrees pretty widely. and then, from thursday onwards, that's when that amber extreme heat warning kicks in across a good part of england and into eastern wales as well. but wherever you are, you can be feeling the heat. some disruption due to the those high temperatures in terms of health problems, potentially transport problems as well. so, thursday, another hot, dry day away from the north—west of scotland, and temperatures widely in the mid—to—high 20s in the north, mid—30s in the south. 3a degrees, possibly 35 degrees on thursday, could be even a degree or so hotter than that as we head on into friday. again, a bit more cloud and rain for the western isles, highlands, northern isles as well where it's a little bit cooler, but most of us baking in that hot sunshine, so the mid—20s to mid—30s during the course of friday. if we zoom into the hottest spots — probably across parts of central and southern england, just into wales as well — somewhere here could well see 36 degrees on friday. and then looking towards the weekend, perhaps even a degree or so hotter
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than that into saturday. so, warm sunshine once again lasting for many of us through the course of the weekend. we are hopeful that things will start to change a little bit later on sunday, particularly overnight and into monday. a few thunderstorms developing across france, which could really do with the rainfall, and then they look like they'll develop more widely across the uk, but still quite a lot of uncertainty at this stage about exactly when and if those thunderstorms are coming. but we're hopeful that, into next week, things will start to turn cooler with an increasing chance of rain. bye— bye.
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good morning, welcome to breakfast with ben thompson and sally nugent. 0ur headlines today. households owe energy suppliers more money than ever before as bills are set to sky rocket in october. £1.3 billion, that's how much we collectively owe suppliers — that's an all—time high. in the next few minutes we will learn how much profit eon is making and ask how that can happen as households struggle. hosepipe bans and extreme weather warnings as much of england and wales brace for a heatwave. it will turn hotter, especially from thursday to sunday where the met
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