Morning business round-up: Toyota in mass recall

What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Market Data

Last Updated at 06:01 ET

Market index Current value Trend Variation % variation
Dow Jones 16919.59 Up 80.85 0.48%
Nasdaq 4527.51 Up 62.59 1.40%
S&P 500 1981.60 Up 9.86 0.50%
FTSE 100 6757.03 Down -22.28 -0.33%
Dax 9285.72 Down -48.56 -0.52%
BBC Global 30 7309.88 Down -30.27 -0.41%

Toyota is voluntarily recalling more than seven million vehicles worldwide, including some Yaris, Corolla and Camry models, over faulty window switches.

It affects 1.39 million cars in Europe, 2.47 million in the US and 1.4 million in China.

Toyota is also recalling 459,000 vehicles in Japan, 650,000 in Australia and Asia, as well as hundreds of thousands from across the Middle East, and from within Canada and its other, smaller markets around the world.

The carmaker said there had been no reports of accidents, injuries or deaths as a result of the window problem.

A regulatory deadline is looming for UK defence firm BAE and Airbus-owner EADS, who must decide whether to proceed with their planned merger by 16:00 GMT.

The aerospace and defence deal looks likely to fall through, according to BBC business editor Robert Peston.

The UK, French and German governments have been holding talks to clear political objections over the merger.

The UK wants its counterparts to agree to limit their influence in the merged firm in order to maintain BAE's strong working relations with the US Pentagon.

Risks to global financial stability have increased in the past six months despite efforts by policymakers to make the financial system safer, according to the International Monetary Fund.

It said little progress had been made in making the system more transparent and less complex, and that confidence in it had become "very fragile".

The eurozone debt crisis remained the main cause of concern, the fund said.

On Monday, the IMF downgraded its forecast for global growth, predicting growth in 2013 to be 3.6%, down from 3.9% in its previous forecast in July. This included sharp downgrades for the UK, Brazil and India.

Canada has invoked a "national security exception" for hiring firms to build a secure communications network, allowing it to block those seen as a security risk.

Canada did not name any firms, but there is speculation the move may be targeted at China's Huawei.

Questions have been raised about Huawei's ties to the Chinese military, something the firm denies.

Business headlines

On Monday, a US panel said that Huawei posed a security threat to the country.

The governor of China's central bank has pulled out of the International Monetary Fund (IMF) and World Bank meetings being held in Japan.

The move comes amid an ongoing territorial dispute between the two countries.

Relations between the two soured after Japan said it had purchased disputed islands in the East China Sea claimed by both Tokyo and Beijing.

Yum Brands, which runs the KFC, Pizza Hut and Taco Bell restaurant chains, has seen third-quarter profits soar 23%, boosted by strong sales in China.

The firm has reported a net profit of $471m (£294m) in the three months to 8 September.

China contributed more than half of Yum's $3.6bn revenue during the period.

The latest Business Daily podcast from the BBC World Service hears from the Russian energy minister about how it is reshaping the energy market.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    MORTGAGES 10:51:

    More from the Council of Mortgage Lenders on those strong lending figures for July. Mortgage activity has remained "robust" despite the introduction of tougher mortgage lending rules in April, it said. Property sales in the first six months of 2014 were up 25% from a year earlier, it added, but "we expect tha0t intensifying affordability pressures could start to dampen this upwards trend".

     
  2.  
    INTEREST RATES Via Email Peter Hemington Partner at BDO

    "There are still big question marks for businesses on when the rise might come. Businesses cannot plan for growth on the basis of vague or conflicting statements - policy makers can do more to provide certainty for businesses, enabling them to make informed decisions for the future."

     
  3.  
    MORTGAGES 10:33:
    Mortgage form

    Mortgage lending hit a near six-year high in July, according to the latest figures from the Council of Mortgage Lenders. Gross mortgage lending rose to £19.1bn last month, the CML said, the highest figure since August 2008. The figure was up 7% from the previous month and 15% higher than a year earlier.

     
  4.  
    INTEREST RATES 10:23: BBC News Channel
    Michael Saunders

    A "fairly major step" is how Michael Saunders, chief economist at Citigroup, describes the news of the split vote on the MPC. But he says we shouldn't fear a rate rise as the economy is in good shape. "Rates will go up in the next six months or so... and will steadily rise from there," he tells the BBC. The pound may rally further as rates rise because of sterling's "incredibly weak" starting point, he adds.

     
  5.  
  6.  
    POUND REACTION 10:10:
    Pound-Dollar

    News of the split vote on the MPC has sent the value of the pound higher, as the minutes suggest a rate rise could happen that much sooner. Against the dollar, sterling climbed to $1.6680, which was up 0.3% for the day.

     
  7.  
    STANDARD CHARTERED Ian Gordon Banking analyst, Investec

    "There appears to be no suggestion by the New York Department of Financial Services of any wrongdoing or breach of regulations by Standard Chartered. What it claims to have identified is a deficiency in a surveillance system at Standard Chartered's New York branch to identify and/or flag certain "high risk" transactions... We estimate a 1-2% adverse earnings impact."

     
  8.  
    INTEREST RATES 09:52:

    For the majority of the Monetary Policy Committee, "there remained insufficient evidence of inflationary pressures to justify an immediate increase in Bank Rate", the minutes showed. They noted that the latest Inflation Report had inflation reaching the 2% target only at the end of a three-year forecast period. Economic growth is likely to slow slightly, and wage growth remains weak, they said.

     
  9.  
    INTEREST RATES 09:44:

    For Martin Weale and Ian McCafferty, "the continuing rapid fall in unemployment alongside survey evidence of tightening in the labour market created a prospect that wage growth would pick up", the MPC minutes show. "Since monetary policy, too, could be expected to operate only with a lag, it was desirable to anticipate labour market pressures by raising Bank Rate in advance of them."

     
  10.  
    INTEREST RATES 09:32:

    The MPC minutes show that Martin Weale and Ian McCafferty both voted to raise interest rates to 0.75% from 0.5%. It's the first time the MPC's vote has not been unanimous for more than three years.

     
  11.  
    INTEREST RATES Breaking News
    Bank of England

    The Bank of England's Monetary Policy Committee voted 7-2 in favour of holding interest rates at 0.5% earlier this month, minutes have shown.

     
  12.  
    MARKET UPDATE 09:22:

    Shares in Balfour Beatty have fallen more than 6% after the company rejected the latest takeover proposal from rival Carillion. Glencore shares are up 0.4% after the commodity trader and miner reported better-than-expected first half profits.

     
  13.  
    MORTGAGES 09:13: BBC Breakfast
    BBC Breakfast

    The expectation that interest rates are going to start rising in the coming months has led to a surge in homeowners remortgaging. The Money Advice Bureau says there was a 21% spike in remortgaging applications last month. Kerry Rowling from Marble Mortgages told BBC Breakfast it's worthwhile putting the time in to find a good rate. And she says there are still many fee-free deals around.

     
  14.  
    FRENCH ECONOMY 09:02: BBC Radio 4

    The Today programme has been looking at why the French economy has ground to halt, with zero growth over the past six months. "The main drag on French growth is the lack of investment," says Eric Chaney, chief economist at AXA Group. "Companies in France do not want to invest because of very high taxation, very tough regulation and a lot of uncertainty about government policy."

     
  15.  
    AMAZON ROW 08:48: Radio 5 live
    Amazon screen shot

    Amazon has been criticised recently over its treatment of publishers. Economist John Kay says on Wake Up to Money the traditional publishing business is on the way out. "It used to be a complicated business getting a book into the hands [of the public]," he says, "it's not any more." Authors will get more proceeds from the books, he says, and Amazon won't have a monopoly.

     
  16.  
    GLENCORE BUYBACK 08:39:

    Commodity trader and miner Glencore has said it will buy back $1bn of shares over the next six months. The company also reported an 8% rise in first half earnings to $6.5bn (£3.9bn), beating analysts' estimates.

     
  17.  
    MARKET UPDATE 08:24:

    After two days of strong gains, the main European stock markets have inched lower in early trade.

    • The FTSE 100 is down 11.11 points at 6,768.20
    • Germany's Dax index is 14.86 points lower at 9,319.42
    • In France, the Cac 40 is down 9.57 points at 4,244.88
     
  18.  
    ARGENTINA DEBT 08:20:
    Cristina Fernandez

    President Cristina Fernandez has proposed laws that will push bondholders to swap defaulted debt for new bonds governed by Argentine law, to try to avoid a US ruling that prevented her government from paying some creditors. Argentina entered default last month after a New York court blocked an interest payment of $539m owed to holders of bonds issued under US laws that was restructured after the country's record 2002 default.

     
  19.  
    INTEREST RATES 08:02: BBC Radio 4

    The Bank of England's Monetary Policy Committee (MPC) has voted unanimously to hold rates at 0.5% for the past three years. Peter Warburton, who sits on a 'shadow' MPC, organised by the Institute for Economic Affairs, tells the Today programme that it looks like the consensus is beginning to crumble, although the latest MPC minutes could still show a 9-0 vote in August.

     
  20.  
    Via Twitter Adam Parsons Business Correspondent

    tweets: "Diego Hernández to become Chief Executive Officer of FTSE100 miner Antofagasta"

     
  21.  
    HEINEKEN RESULTS 07:35:
    beer

    Heineken beat analysts' forecasts for its first-half results, although along with Carlsberg it said it sold less in Russia. The Central and Eastern Europe business was hit by bad weather and floods. Operating profit before one-off items rose 9.6% in the first six months of the year to 1.45bn euros ($1.93bn; £1.16bn),

     
  22.  
    CARLSBERG RESULTS 07:23:
    beer

    Danish brewer Carlsberg has said annual profits will drop because of western relations with Russia. The country generates 35% of operating profit but Russia could enter recession this year. "The overall performance in the second quarter looks fine, but they are downgrading their guidance due to the macroeconomic uncertainty in the Eastern European region. So it is a mixed bag," analyst Morten Imsgard from Sydbank said.

     
  23.  
    BALFOUR BEATTY 07:18:

    Balfour Balfour said it rejected Carillion's latest offer because it failed to address "two key concerns". It said there were "considerable risks" associated with the proposed business plan. It also objected to Carillion's intention to halt the planned sale of Balfour's Parsons Brinckerhoff business in the US, "at a point when it is reaching a successful conclusion".

     
  24.  
    BALFOUR BEATTY 07:08:
    Balfour Beatty worker

    Balfour Beatty has rejected the latest takeover bid from rival Carillion. The offer was sweetened on Tuesday for the third time, valuing Balfour at more than £2bn. But Balfour said the proposal was "not in the best interests" of its shareholders.

     
  25.  
    BHP BILLITON 06:57: BBC Radio 4
    BHP Billiton logo

    On Tuesday, mining giant BHP Billiton announced plans to spin-off billions of dollars worth of assets into a new company. Elaine Coverley, head of equity research at Brewin Dolphin, told the Today programme that it's a sign that shareholders in the sector are demanding more discipline from management and seeking better dividends.

     
  26.  
    STANDARD CHARTERED 06:44: Radio 5 live
    Standard Chartered

    Elaine Coverley, head of equity research at Brewin Dolphin is on Wake Up to Money, this time talking about Standard Chartered. Standard Chartered has agreed to pay $300m (£180m) to New York's top banking regulator for failing to improve its money laundering controls. "It's a blow," she says. "In the past the management were very well respected."

     
  27.  
    JAPAN EXPORTS 06:31:
    Tokyo port

    Japan's exports grew in July for the first time in three months, figures have shown. Exports were up 3.9% from a year ago thanks to higher shipments of cars and electric machinery. However, imports rose by 2.3%, largely due to purchases of oil and gas. This meant the trade deficit came in at a larger-than-expected 964.0bn yen ($9.4bn; £5.6bn) for the month.

     
  28.  
    BALFOUR MERGER 06:16: Radio 5 live

    Elaine Coverley, head of equity research at Brewin Dolphin is on Wake Up to Money. Carillion is back with improved terms to buy Balfour Beatty. "It is getting more hostile," she says. Balfour Beatty shareholders "need to petition the board to look at this offer much more closely", she says.

     
  29.  
    INTEREST RATES 06:10: Radio 5 live
    Bank of England

    A rise in interest rates is "long overdue", economist Peter Warburton tells Wake Up to Money. The minutes from August's meeting of the Bank of England's Monetary Policy Committee are out later and could show some members favoured a rate rise. Mr Warburton thinks several economic indicators suggest rates should already have gone up.

     
  30.  
    PALLADIUM PRICES 06:02: Radio 5 live

    Jim Slade, a director of European Exhaust & Catalyst, is on Wake Up to Money talking about palladium, which is used in catalytic converters. The price of palladium has risen by 25% this year. "There's a lot of debate about Russia and whether they have a huge stockpile or whether it's depleted," he says.

     
  31.  
    06:00: Nick Edser, Business reporter

    Good morning. You can email us at bizlivepage@bbc.co.uk and tweet us at @bbcbusiness.

     
  32.  
    06:00: Howard Mustoe Business reporter

    Hello. Today we can look forward to minutes from the Bank of England's Monetary Policy Committee, plus company results and analysis. Stay tuned.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.