Transcripts For BBCNEWS Business Today 20240920

In cutting the cost of borrowing for the first time in overfour years. The Federal Reserve have dropped the main Interest Rate in the worlds biggest economy by half a percentage point, bringing it down to between 4. 75 and 5 . A drop larger than many expected, with some wondering now if this reflects the scale of the problems facing the american economy or the success in getting the pace of price rises, inflation, close to the banks targets. The governor of the fed, Jerome Powell says the us economy is in good shape and they intend to keep it that way. Our North America Business correspondent Ritika Gupta has the details. The Federal Reserve has delivered a super sized Interest Rate cut aimed at bolstering the us Labour Market. The 0. 5 percentage cut, the first in over four years, brings its key Interest Rate, the federal funds rate, down to between 4. 75 and 5 . It comes amid Signs Inflation in america is continuing to fall, while the Job Market remains strong, even as unemployment has risen this year. The Labour Market is actually in solid condition and our intention with our Policy Move Today is to keep it there. You can say that about the whole economy. The us economy is in good shape, its growing at a solid pace, inflation is coming down. The Labour Market is in a strong pace. We want to keep it there. In addition, the Committee Setting Rates released its latest forecast which showed policymakers expecting to cut rates by a further 0. 5 . That would us Interest Rates below 4. 5 by the end of this year. While these Rate Cuts initially only affect short Term Borrowing costs for banks, they should spill over to consumer loans such as mortgages, Auto Loans and credit cards. So a big move from the us and today its the uks turn. The Bank Of England makes its next Interest Rate decision at Noon Today with many hoping for further drops in the cost of borrowing. But most experts predict it will keep rates on hold here. The current main Interest Rate is sitting at 5 , having been cut last month for the first time since march 2020. Youll remember we ended up here after a series of rate rises to try and bring down inflation which hit a peak of 11. 1 back in 2022, since then inflation has been brought down significantly with the latest reading of 2. 2 for august. But while the rate of inflation is falling, prices are still much higher than four years ago with many people having to make huge sacrifices to make ends meet. As our chief Economics Correspondent Dharshini david reports. Getting a Dream Home for your family has gotten harder with the cost of living crisis pushed up bills including rent, challenging even for those in workforce stop my family helped rebus. It workforce stop my family helped rebus. ,. , rebus. It helped because we could not rebus. It helped because we could not afford rebus. It helped because we could not afford the rebus. It helped because we could not afford the moving | could not afford the moving dad. ~ ,. , could not afford the moving dad. ~ ,. ,. ,. , dad. Like james who had to downsize dad. Like james who had to downsize and dad. Like james who had to downsize and face dad. Like james who had to downsize and face other dad. Like james who had to i downsize and face other tough choices just as their son arrived. Choices ust as their son arrived. Arrived. When i went on maternity arrived. When i went on Maternity Leave arrived. When i went on Maternity Leave i arrived. When i went on Maternity Leave i could | arrived. When i went on Maternity Leave i could only go off for about ten weeks to spend with my side because we could not afford even more, even that was a major stretch to the point where we had to put ourselves into a bit of death. It put ourselves into a bit of death. ,. ,. , put ourselves into a bit of death. , death. It was the Food Banks that not death. It was the Food Banks that got us death. It was the Food Banks that got us through death. It was the Food Banks that got us through that death. It was the Food Banks| that got us through that one. Definitely. They were so generous. Donating milk and toiletries. Generous. Donating milk and toiletries. ~. ,. , toiletries. The Bank Of England is very aware toiletries. The Bank Of England is very aware of toiletries. The Bank Of England is very aware of the toiletries. The Bank Of England is very aware of the paid is very aware of the paid higher prices can inflict and subsoil basin pretty quickly it is likely to pause and not cut Interest Rates again this month. However, take a look at fixed Rate Mortgage deals. Those are coming down because of expectations rates will fall further in becoming months. That has injected new life into the Property Market and increased prices. Where does that leave those looking to switch from reading to buy . Houses are still actually quite expensive. A typical odour by a typical first expensive. A typical odour by a typicalfirst home expensive. A typical odour by a typical first Home Property with a typical deposit, the monthly Mortgage Payment is taking 36 of their average take Home Pay and the long Term Average is above 30. It is much more stretched than before because House Prices are still high relative to ratings eight edges rates are somewhat higher than before. Edges rates are somewhat higher than before than before. Analysts think the Bi Aer than before. Analysts think the bigger piglet than before. Analysts think the bigger piglet will than before. Analysts think the bigger piglet will cut than before. Analysts think the bigger piglet will cut again than before. Analysts think the bigger piglet will cut again in l bigger piglet will cut again in november. It is the balance of the risks of Price Pressures reimagined with the pain of Borrowing Costs inflicting not just Odd Buyers but venturers as well. Notjust Odd Buyers but renters as well. To talk about the central Bank Action on both sides of the pond im joined by kallum pickering, Chief Economist at Peel Hunt and swetha ramachandran, Fund Manager at artemis investment management. Good morning to both of you. Calibre, your thoughts on why the Fed Cut by 50 Basis Points this time. I the Fed Cut by 50 Basis Points this time this time. I was one of The Economist this time. I was one of The Economist that this time. I was one of The Economist that thought i this time. I was one of the L Economist that thought they would all go 25 Basis Points but late last week the market moved prices from 25 to 50 Basis Points in a dissipation that created a window for the Federal Reserve to go big and frontloaded Interest Rate cuts and probably if the fed was odd as they wished they would have god and earlier month earlier. The bigger piglet had already ripped so the bank please catch up and my suspicion is it will only be a 25 Basis Cut next time. Like calibre, nearly everyone i interviewed said many want half a Percent Cut but wont get that. They will get a smaller cut because part of the visitors they dont want to signal the are concerned about us economy. That is the tight rope they have been walking and they managed to successfully execute that yesterday in the comments following the announcement they would be cutting by 50 Basis Points. But the are cutting by 50 Basis Points. But they are not cutting by 50 Basis Points. But they are not concerned. If We Io they are not concerned. If we go back they are not concerned. If we go back to they are not concerned. If we go back to years and accusations that they were a Little Accusations that they were a little too accusations that they were a little too slow to react to inflation. The comments were much inflation. The comments were much that inflation. The comments were much that they wanted to pre empt and be ahead of the Curve Pre Empt and be ahead of the curve rather than behind the Curve Curve rather than behind the curve when it comes to cutting Rates Curve when it comes to cutting rates and curve when it comes to cutting rates and perhaps while they see the rates and perhaps while they see the Labour Market as healthy see the Labour Market as healthy today, any further deterioration in the Labour Market. Deterioration in the Labour Market, any further slogging a ob market, any further slogging a job to market, any further slogging a job to bed is how they put it inioh job to bed is how they put it Injob Openings would lead to an increase in the Unemployment Rate an increase in the Unemployment Rate i an increase in the Unemployment Rate. I think the Band Aid has shifted rate. I think the Band Aid has shifted away from Fighting Inflation that appears to be well inflation that appears to be well on inflation that appears to be well on the path to contentment to Fight Well On The Path to contentment to fight unemployment which looks to fight unemployment which looks to to fight unemployment which looks to set to increase but at a gradual looks to set to increase but at a gradual and manageable pace. What a gradual and manageable pace. What is a gradual and manageable pace. What is the Fed S a gradual and manageable pace. What is the fed 5 next move what is the fed � s next move the bed, in your view . The market is the bed, in your view . The market is pricing the bed, in your view . The market is pricing at the bed, in yourview . The market is pricing at about 75 Basis Market is pricing at about 75 Basis Points ahead for cuts ever Basis Points ahead for cuts ever made of the biggest defenders of that is signalling 50 Basis Defenders of that is signalling 50 Basis Points. I think it residual 50 Basis Points. I think it residual will have to depend on the Labour Market and Howl Deployment rates before. It Deployment Rates before. Bigger Deployment Rates before. It bigger piglet meeting, everybody i speak to says no change today. I would imagine many watching programme like those Like Mcculloch have been talking, say at all if we could have a similar Rate Cut today. As we learn yesterday dont pay too much attention to what economists think ahead of these meetings. Unless list decide the market and economists agree the market and economists agree the bigger piglet probably wont cut Interest Rates. That is not good News Today for people with mortgages was a get would fall but inflationary pressure is still elevated in the uk so by going a bit more slowly the Bank Of England will be reducing the risk Interest Rates have to stay high over the next months and years. What we will probably get today is a signal the bigger piglet is thinking about continuing to reduce Interest Rates and that will set us up probably for a november card. The Open Question is what will the government to the 30th of October Budget if they 0ctober budget if they announced Tax Increases and a sending squeeze, but mike said want set them for a successive cuts perhaps in december. I think it is no other table as a potential often option. We potential often option. We had the potential often option. We had the Inflation Up without yesterday that showed overall no change in august, 2. 2 but the servers that number went up and that is worry here . The services and that is worry here . The services and and that is worry here . The services and Inflation Services and Inflation Component of us inflation has been component of us inflation has been stickier than other geographies was certainly the ecb managed to contain this which ecb managed to contain this which is ecb managed to contain this which is why they are great part which is why they are great Part Trajectory is ahead of ours Part Trajectory is ahead of ours in Part Trajectory is ahead of ours in terms of cuts and the us is ours in terms of cuts and the us is seeing shelter but a significant competitive Services Inflation coming down at a gradual pace. I think that limit at a gradual pace. I think that limit in at a gradual pace. I think that limit in the uk has for the physicality associated with it as Well Physicality associated with it as well which is also what prompted this a wait and see approach. Prompted this a wait and see approach approach. What will be our bobble . Approach. What will be our bobble . Following approach. What will be our bobble . Following the approach. What will be our bobble . Following the financial crisis in 2008 we had Interest Rates at record lows for a long type was a bobber when we are in a healthy state, what will be a normal Interest Rate in uk . , be a normal Interest Rate in uk . G , , be a normal Interest Rate in uk . , uk . My best guess, i emphasise as uk . My best guess, i emphasise gas because uk . My best guess, i emphasise gas because we uk . My best guess, i emphasise gas because we had uk . My best guess, i emphasise gas because we had lots uk . My best guess, i emphasise gas because we had lots of gas because we had lots of changes in the delayed economy the last couple of years, probably about 3. 75 before the global financial crisis, probably about 3. 75 before the globalfinancial crisis, it probably about 3. 75 before the global financial crisis, it was about 5 in The Higher level were used see sibley reflects the fact our bags actually Household And Business Balance Sheets have improved significantly. We fixed a lot of the problems so we dont need that extremely easy Interest Rate situation anymore. So it was mostly to be adjusted for that. 3. 75i think is probably my best guess. What is probably my best guess. What is probably my best guess. What is our is probably my best guess. What is your view is probably my best guess. What is your view about . Is probably my best guess. What is your view about . As is probably my best guess. What is your view about . As a is your view about . As a fiuhter is your view about . As a fighter manager, is your view about . As a fighter manager, my is your view about . As a fighter manager, my job is your view about . As a i fighter manager, my job is is your view about . As a fighter manager, my job is to fighter manager, myjob is to react fighter manager, myjob is to react to fighter manager, myjob is to react to changes in Interest Rates react to changes in Interest Rates. Probability of Market Perspective obviously lower Rates Perspective obviously lower rates would be welcomed but clearly rates would be welcomed but clearly we think the balancing, a lot clearly we think the balancing, a lot of clearly we think the balancing, a lot of it clearly we think the balancing, a lot of it depends on Government Policy in terms of taxation Government Policy in terms of taxation and critically the Unemployment Rate as well which would Unemployment Rate as well which would drive the Interest Rate is 12 would drive the Interest Rate is 12 months from here. Thank ou for is 12 months from here. Thank you for the is 12 months from here. Thank you for the great is 12 months from here. Thank you for the great to is 12 months from here. Thank you for the great to get is 12 months from here. Thank you for the great to get your l you for the great to get your reaction. Have a good day. B0. Thank you. Lets now turn to india where a booming Stock Market has meant the country has overtaken china for the very first time in a key global Equities Index managed by Morgan Stanley called msci. 0ur india Business Correspondent Nikhil Inamdar has more from mumbai. India has become the largest emerging market in the investable Market Index which is widely used as a Benchmark Index by global cities tell investors to track the financial performance of Key Companies in fast growing countries. Indias weight in this index has risen to 2. 35 versus chinas 2. 24 according to Morgan Stanley that has created this index. Analyst believe india is likely to continue to gain Share Due to its booming Stock Market and a speed of new public issues as well as a Growth Rate rapidly outpacing china. Rome waited in these visits will be in india is likely to attract higher flows of foreign Investor Money even as the company means one of the best Performing Equity Markets in the world. India is now the sixth largest Market Globallyjust behind france globally just behind france according globallyjust behind france according to Morgan Stanley for subtalar weight in this index meanwhile in harvard since its peak in 2021 reflecting the economic struggles of asias largest economy. Nikhil inamdar there. Finishing on chinas economic struggles. One major problem for the worlds second largest economy is in Trade Wars with the worlds other major economic powerhouses, particularly when it comes to electric vehicles. The us have announced 100 tariffs on chinese made ev� s and the European Union is proposing its own 35 tariff. Thats due to go to an Eu Vote next week. Today Chinas Commerce Minister is in brussels hoping for a last minute reprieve. Varg folkman is Policy Analyst at the Think Tank the European Policy centre. They will be hoping to peel off some leaders of Member States that might side with them next week and not make the Tariffs Permanent. Week and not make the Tariffs Permanent permanent. How will the Boat Work for those permanent. How will the Boat Work for those watching permanent. How will the boat i work for those watching another word . Is It Majority that will be improved . Talk as to how it works next week. The be improved . Talk as to how it works next week. Works next week. The maority of inhabitants i works next week. The maority of inhabitants of i works next week. The maority of inhabitants of The H works next week. The maority of inhabitants of the Eu H works next week. The majority of inhabitants of the Eu Has i works next week. The majority of inhabitants of the Eu Has to | of inhabitants of the Eu Has to walk tariffs down so it will be in 12 member countries having the weight said number of inhabitants in eu collectively and if they maike down then tariffs will not get permanent at all. If they vote for it then they will get permanent for the next five years. In the Member States, was for and against . Germany has been the most vocal voice against this. They have a large domestic Water Manufacturing Industry of their own and they feel the chinese will be tallied against them if they vote through His Tariffs. The spanish have been wavering, they have their Prime Minister into a little time ago and he seemed to turn face on the tariffs which he had previously supported and have other member countries like france that are very much for His Tariffs. France that are very much for His Tariffs His Tariffs. What you think is riaht His Tariffs. What you think is right answer . His tariffs. What you think is right answer . The His Tariffs. What you think is right answer . The eu i His Tariffs. What you think is right answer . The Eu Has i His Tariffs. What you think is i right answer . The Eu Has been going in a stronger direction of Foreign Policy in recent years. Of Foreign Policy in recent ears. ~. , of Foreign Policy in recent ears. ,. , years. We have seen Tonys Overcapacity years. We have seen Tonys Overcapacity in years. We have seen Tonys Overcapacity in the years. We have seen Tonys Overcapacity in the eu i years. We have seen Tonys Overcapacity in the Eu Base| years. We have seen tonys I Overcapacity in the Eu Base had been flooding europe insurers. I believe tariffs of the right team right move. They need to show some sort of strength and make the chinese realise they cannot really just and make the chinese realise they cannot reallyjust make a letter of capacity on europe insurers. It letter of capacity on europe insurers insurers. It is a Fidgeting Scenario insurers. It is a fidgeting Scenario Planning insurers. It is a fidgeting Scenario Planning out i insurers. It is a Fidgeting I Scenario Planning out because this is all happening hot on The Heels of the report into The Heels of the report into the future of Europe Competitiveness across europe and how europe is lacking behind, Notjust China but also the us on so many levels. Analytic vehicles are one of the key examples of that. It the key examples of that. Lit definitely is. Europe has pulled behind what comes to electric vehicles. China jumped ahead. There will be hired European Automakers and there is the danger of subsidised evs get to compete in europe without any balancing tariffs, they will outcompete European Manufacturers and we will lose out. We know automakers are a huge part, at least beat german economy in europe and the Chris Brennan competitiveness. Brennan competitiveness. Thank ou. Around the world and across the uk. This is bbc news. Australia is being urged to follow peru and New Zealand to legally protect Surf Breaks to boost tourism and well being. A new survey from the Australian National University says surfing injects around 2 Billion into the australian economy each year. Researchers say governments have overlooked the value of Surf Breaks. From sydney, Phil Mercer reports. Surfing in australia has a proud history. A pioneer was The Hawaiian legend jude kahanamoku, who showcased his skills here more than 100 years ago. But researchers say Australias World Class Surf Breaks need more legal protection. Unfortunately, because of a growing number of pressures including climate change, coastal erosion, and competition for coastal spaces, the elements that make those high quality waves possible are in many cases endangered. I dont think the lack of protection right now is deliberate, i think itsjust Surf Breaks, currently they fall in a Blind Spot for policymakers. Peru and New Zealand have comprehensive measures to safeguard popular surfing spots. In australia, the sport has great social and economic value. From beginners to salt water veterans, surfing generates about 2 Billion each year in australia. Its very long coastline is arguably its greatest natural treasure. The ocean is like a magnet for board riders who relish their sports physical and psychological benefits. Love it. So ive had the business 30 years, just looking forward, i just see it as being a slow growth. We try not to grow too fast here like the surf school, because you dont want to crowd out the ocean. With too many surfers. Surfing is an Olympic Sport and its global appeal is growing. The World Surf League has recently taken events over to india, and there has been professional surfing there in china for over a decade now as well. So anywhere theres ocean and rideable waves, there seems to be a Surfing Contingent these days. The government estimates there are more than 720,000 active adult surfers in australia. There are probably many more when children and international tourists are accounted for. Australia is sort of seen as the country to surf. Ijust thought i would love to be able to teach people and share the joy of surfing, and its nice to not be working in an office, its nice working at the beach and getting sunshine and being in the water all day. For those chasing the perfect wave, surfing is about embracing the power of nature. For them, its a gift that should be protected. Phil mercer, bbc news, sydney. Now before we go lets Talk Lithium which is one of the key minerals needed for the green transition. It is a critical component in the batteries needed to power so many device that we are using all the time such as our smartphones laptops electric cars scooters the list is long and demand is booming. But resources are in short supply particularly in europe but one project here in the uk is hoping to be part of changing that. The Uk Government is now backing plans to turn a giant disused Clay Pit in cornwall into a lithium mine. To tell us morejoining me now isjeremy wrathall, founder of cornish lithium. Good morning. Is this music to your ears . The Uk Government is backing this plan . It is your ears . The Uk Government is backing this plan . Backing this plan . It is great to have the backing this plan . It is great to have the support backing this plan . It is great to have the support of backing this plan . It is great to have the support of the i backing this plan . It is great| to have the support of the Uk Government and great we have gone desiccated as a project of national significance. That is really good. All this helps Government Support because this is a trend that will affect all the lives as a move to renewable Power And Battery storage. Renewable Power And Battery storaue. ,. Storage. How much lithium will be able to storage. How much lithium will be able to access . Storage. How much lithium will be able to access . It storage. How much lithium will be able to access . It is be able to access . It is interesting be able to access . It is interesting uk be able to access . It is i interesting Uk Government visibly categorised the amount of lithium we need by 2030 is about 80,000 tons. It is just updated that advice that indicates we will need more than that. At our operations and cord while we hope to provide about 25,000 tons, just over a quarter. We are not alone. There is another company next to us who will provide another 20,000 tons. We are rapidly going towards at least half of the domestic Need Source Popcorn well, possibly a lot more at other parts of the uk as well. The most important thing is every type of lithium we can supply, domestically is a tide which would have to import and if we import lithium from other countries such as china we are exporting the job potential economic potential to them. The lithium, you will bide the lithium and that goes to wherever it goes to be embedded into the devices we are than biag. 0ften those devices are not made in the uk, are they . Would be exported anyway, what is it . We are building batteries in the uk. There is a new biggerfactory be built. Youre going to need the lithium here and goes in the lithium here and goes in the uk produced batteries. Lh the uk produced batteries. In terms of the price of lithium, i assume it is pretty inflated. Demand is high and they short supply. Demand is high and they short su l. ,. , demand is high and they short su l. ,. , supply. There was a runup. One raid run supply. There was a runup. One rapid Run Up supply. There was a runup. One rapid Run Up to supply. There was a runup. One rapid Run Up to 82,000 supply. There was a runup. One rapid Run Up to 82,000 a i supply. There was a runup. One rapid Run Up to 82,000 a ton i rapid Run Up to 82,000 a ton in 2022. It does come back quite a bit recently because of overproduction in china. Overall, the long Term Trend is very strong. We are currently producing 1 Million tons globally. We will need 4 Million tons by 2030 two quadruple demand that is not satisfied right now. In quadruple demand that is not satisfied right now. Satisfied right now. In Terms Ofthe satisfied right now. In terms of the logistics, satisfied right now. In terms of the logistics, we satisfied right now. In terms of the logistics, we much i of the logistics, we much better . There is the government backing, what do you need to make this happen . To me these goals . Make this happen . To me these coals . ~. , make this happen . To me these oals . ,. , , goals . We are rapidly getting there. Goals . We are rapidly getting there we goals . We are rapidly getting there. We are goals . We are rapidly getting there. We are about goals . We are rapidly getting there. We are about to i there. We are about to commission and it demonstrates the plant in cornwall. The infrastructure is therefore the Government Support is there and more importantly we created in Government Support other support from other investors to other investors, one of which in the us and one in the uk. Notjust Government Support, not just Government Support, Wide Notjust Government Support, wide support from other investors as well. Wide support from other investors as well. Thank you for. Investors as well. Thank you for there investors as well. Thank you for. There is investors as well. Thank you for. There is so investors as well. Thank you for. There is so much investors as well. Thank you for. There is so much more | investors as well. Thank you | for. There is so much more to discuss on that subject. Not least of course how clean is this . Mining lithium. We will have to dig deeper on another day for that we are out of time have a good day and we will see you soon. Hello, there. Thursday promises to be another unusually warm September Day for large parts of the uk, although in the north of scotland, it may not be quite as warm as it was on wednesday when aviemore got above 25 degrees celsius some nine or ten degrees above the seasonal average. But Notice Lake Vyrnwy languished at 14 degrees because in those parts of Mid Wales we saw a bit more cloud lingering for a good part of the day. Some of that cloud returning from the east as well, so england and wales seeing a pretty cloudy start, actually, in some places. But that Cloud Tending to retreat by the afternoon towards the east coast, some Cloud Rolling onto the coast of Eastern Scotland. Elsewhere, though, some good spells of sunshine, just a very, very small chance of seeing a shower across southern counties of england. But it really is only a very small chance. Now, where youre exposed to the breeze along the north sea, temperatures may only get to 17 or 18 degrees. Compare that with 25 in parts of southeast england. And then through thursday night, we do it all again, we bring more cloud back in from the east, may turn a little bit misty and murky in places. That cloud will hold the temperatures up 15 degrees in london as we start friday morning, maybe 8 or 9 in aberdeen and glasgow, a little Bit Cooler where we start with clear skies overhead. But the focus of our weather does start to shift as we go through friday. We start to turn our eyes to the south with this developing area of low pressure, and that will start to bring some showers and some thunderstorms across parts of southern england, perhaps getting into the midlands, perhaps into the southern half of wales as we go on through the day. Eastern scotland, Northeast England holding on to a lot of Mist And Murk and low cloud. That will peg the temperatures back. Conversely, Western Scotland and Northern Ireland should see plenty of sunshine. Now, into saturday, those showers and thunderstorms in the south perhaps becoming more frequent, pushing a little bit further northwards. Still rather cloudy for coasts of Eastern Scotland and Northeast England, Western Scotland and Northern Ireland seeing plenty of sunshine. But those temperatures generally down just a little bit by this stage. And then by sunday, our area of low pressure really makes its move, bringing showers or longer spells of rain, particularly across england and wales. The Odd Shower and some extra cloud in Eastern Scotland, but generally in the north of the uk it will stay largely dry. Good morning. Welcome to breakfast with Charlie Stayt and naga munchetty. 0ur headlines today. The late Mohamed Al fayed former owner of harrods is accused of rape by five female ex employees. Explosion. Exploding walkie talkies leave at least 20 dead and more than a50 injured in lebanon, as israel says its opening a new phase in the war. Move away from it. Ill absolutely end your life, bro. Nearly 40 of Customer Service workers consider quitting as a result of verbal and physical abuse. Will the Bank Of England cut the cost of Borrowing Today and follow the us central bank