6 January 2014 Last updated at 05:55

Business Live: Osborne warns of more 'painful cuts'

    0600: Pia Gadkari Business reporter, BBC News

    Good morning and welcome. We've got Chancellor George Osborne's speech coming later, so stick with us through the morning. And, do get in touch at bizlivepage@bbc.co.uk or tweet @BBCBusiness.

    0600: Edwin Lane Business reporter, BBC News

    Morning all, it's Blue Monday and George Osborne seems happy to add to the gloom by warning of more cuts to come this year. But at least elsewhere the business confidence surveys are sounding more upbeat. Stay with us for all the headlines this morning.

    DEBT 0606: Radio 5 live

    Dr John Glen from the Cranfield School of Management crunches the numbers for Wake Up to Money and estimates that while the programme was on air, the UK government ran up an additional £5.5m of debt. "What are they doing with it all?" asks Mickey Clark.

    OSBORNE 0610:

    The Chancellor George Osborne is giving a speech in Birmingham later, but we already know what he is going to say: 2014 is going to be "a year of hard truths", and we can expect more "painful cuts".

    MANUFACTURING 0615: Radio 5 live

    There is a bit of optimism from Terry Scuoler, chief executive of the engineering body the EEF. "This could be a very very positive year," he tells Wake Up to Money, with export led growth in UK manufacturing helping to boost the economy. An EEF report this morning predicts UK manufacturing will expand more than any other country in the EU.

    BANK SPLITS 0619:

    Top story on the Financial Times this morning: European banks will not have to automatically split their retail and high-risk operations. It's still being worked on, but critics are already saying the plans might have little effect other than adding more bureaucracy.

    Expensive tuna

    A Japanese sushi restaurateur called Kiyoshi Kimura has paid 7.36m yen (£43,000) for a 230kg tuna at the first auction of the year at Tokyo's fish market, Associated Press reports. If that sounds like a lot, it's only a fraction of the record 154.4m yen (£900,000) he paid for a similarly sized fish last year.

    DEBT 0634: Radio 4

    There's more discussion of debt over on Radio 4. Robert Stheeman, chief executive of the UK Debt Management Office, tells Simon Jack how the government might deal with an eventual increase in interest rates. "It may be a little less simple to absorb our debt quite so smoothly," he warns.


    Asian markets are down this morning - quite sharply, actually. In Tokyo, the Nikkei 225 is more than 2.1% in the red on the first trading day of the year, and in China the Shanghai Composite is more than 1.2% down.

    CHINESE SERVICES 0644: Radio 4

    Fund manager George Godpur from investment firm Miton is on the Today programme this morning, after Chinese economic data suggested activity has been slowing in the country's services sector. He warns that Chinese debt levels are "scary", and says many investors may choose to keep their money in sterling in light of the riskier outlook.

    BITCOIN Via Twitter

    The BBC's Puneet Singh in Singapore tweets: "Bitcoin tops $1,000 again on Zynga adoption. Wonder if any other 'currency' - virtual or real, has seen such high volatility recently?" (Bitcoin's value rose after social gaming firm Zynga agreed to use the currency as a payment option.)

    CONFIDENCE 0649:

    More optimism from a survey from Lloyds Banking Group too this morning - it says businesses are more confident than they have been in the last 20 years as the economy picks up.

    DEBT 0702: BBC Breakfast

    Breakfast's Steph McGovern employs the artistry of the BBC graphics department to explain everything you need to know about debt. We collectively owe £1.43tn in the UK through things like mortgages and other loans, that's an average of £29,000 per head. Meanwhile, the government itself owes £1.23tn.

    Greenland icebergs

    At the moment there's no mining of any kind in Greenland, but that may be about to change, the Guardian reports. British mineral company London Mining is trying to put together a group of investors to build a £1.5bn iron ore mine close to the Arctic Circle. But there are concerns about the environmental impact on this pristine part of the world.


    The Telegraph reports that major UK companies are due to pay out as much as £72.4bn in dividends. Data from Markit suggests the size of the dividend is going to increase by about 4.5% in the current financial year. Oil and gas companies are leading the pack with the biggest payments, but if you hold banking and pharmaceutical stocks you won't do badly either.

    OLYMPIC STADIUM Via Twitter Adam Parsons Business Correspondent

    tweets: "A day after West Ham lose 5-0, Balfour Beatty confirm £154m contract to transform Olympic stadium. Incs world's biggest cantilevered roof"

    MINT COUNTRIES 0726: World Service

    Jim O'Neill, the economist who coined the term "Brics" to describe Brazil, Russia, India and China, has just come up with his next acronym: "Mint". That stands for Mexico, Indonesia, Nigeria and Turkey. He tells the World Service that Nigeria's fast-growing population makes it a country to watch. "By 2050 Nigeria could be a populated country bigger than the United States," he says.

    CHRISTMAS SALES Via Twitter Douglas Fraser Business and economy editor, Scotland

    tweets: "Asda not giving overall Christmas figures but hit £5m per day in online groceries, 21 & 22 Dec. Xmas sweaters & onesies "incredibly popular""

    MINT COUNTRIES 0733: World Service

    Jim O'Neill says Nigeria has the potential to match China in terms of growth. "If Nigeria can do things to improve its productivity and power... the potential for Nigeria to grow double-digit Chinese-style is really quite easy," he tells Newsday. The BBC will be looking at each of the Mint countries over the next few days.


    One in five workers in the UK is planning to leave their job in the next year, a survey from the Institute of Leadership and Management has found. 16% said this was because they did not feel valued by their current employer, and the most popular new year's resolution was... improving their work/life balance. Does this sound like you? Get in touch at bizlivepage@bbc.co.uk or tweet @BBCBusiness.

    OSBORNE Via Twitter

    George Osborne appears to have decided on his answers for his imminent Today programme appearance. He tweets: "About to be interviewed on @BBCr4today. Will talk about our long term economic plan & the choice for Britain in 2014"

    OSBORNE 0756: Radio 4

    Chancellor George Osborne is on the line. He's not saying whether he would back universal pension benefits in a future parliament, but he adds: "I think people can be clear that a Conservative government will protect older people."

    OSBORNE 0801: Radio 4
    George Osborne

    On to the speech the chancellor will be giving later. He says a further £25bn cuts will have to be made after the next election. So, where will the cuts fall? "I think we do have to look at the welfare budget... It would be a very odd choice for a country that wants to compete in the future to leave [it] untouched."

    DEBT 0807: Radio 5 live

    Robert Stheeman, the head of the Debt Management Office and the man in charge of borrowing billions every year on behalf of the government, is speaking to 5 live's Adam Parsons. He says its important not to get too blase about signing off such massive cheques. "It's important to keep an eye on the number of zeros," he says.

    People arrive at Consumer Electronics Show, Las Vegas

    Some gloomy news from the Consumer Electronics Association on the eve of their major annual convention in Las Vegas. Director of industry analysis, Steve Koening, says the industry is searching for the next innovative product to move beyond smartphones and tablets - those sales are forecast to decline 1% in 2014.

    OSBORNE 0817: Radio 4

    Wages. When are they going to go up? Chancellor George Osborne says it's a hard truth that the financial crisis has made people poorer. "I can't wave a magic wand and make the country richer," he says. "The way the country gets richer - and families get richer - is by being a competitive country that attracts jobs. You can't have a cost of living gimmick. You need to have an economic plan."

    DEBT 0829: Radio 5 live

    Another interesting line from Robert Stheeman, who says the that the loss of the UK's triple-A credit rating last year didn't put investors off lending the UK money. "The market is incredibly efficient in pricing in events. the loss of the triple-A rating had no effect."


    There's not much movement on European markets so far this morning. The FTSE 100 is up just four points so far. The Dax in Frankfurt has added two points, and so has the Cac 40 in Paris. The Nikkei in Tokyo saw a lot of profit taking on the first day of trading in the new year, and has now closed down 2.4%. The Hang Seng in Hong Kong is down 0.6%.

    DEBT Via Twitter Hugh Pym Chief economics correspondent, BBC News

    tweets: "Robert Stheeman of DMO also says UK not completely out of the woods economically"


    Did your company "demise" you last year? Have you been "inboxed"? Or recently purchased an "affordable, portable, lifestyle beverage" otherwise known as a bottle of water? Lucy Kellaway, in the Financial Times, gives her selection of the most ridiculous corporate jargon of 2013. Highly entertaining.

    SPACE 0849: BBC Breakfast

    The government wants to see the UK's £9bn space industry treble in size over the next 20 years, Breakfast reports. Chancellor George Osborne wants to see 100,000 people employed in everything from scientific exploration to satellites for smartphones.


    For another eye-popping read, Bloomberg takes a look at a scandal unfolding across Turkey's construction industry, where much of the country's recent growth has taken place. The "new Turkey" was driven by projects such as giant bridges and a $12bn canal linking the Black Sea to the Sea of Marmara. But now three ministers have resigned and a dozen suspects are in custody... read on.

    OSBORNE 0914: Via Blog Robert Peston Business editor

    blogs on George Osborne's plans for further cuts: "The big question, of course, is whether the UK's economic recovery - at this juncture - will be helped or hindered by further shrinkage of the public sector."

    MINT COUNTRIES Via Twitter
    Nkem Ifejika reports in Nigeria

    BBC World Service presenter Jackie Leonard tweets a photo of business reporter Nkem Ifejika (seen left) as he reports from Nigeria on MINT countries - Mexico, Indonesia, Nigeria, Turkey - a group of nations poised for rapid growth. "Not sure @nkemifejika really needs a hi vis jacket when he's wearing that shirt."

    OSBORNE 0930: BBC News Channel

    "I am standing in a car park in the West Midlands - its not the classic setting for a speech on fiscal policy," says the BBC's political correspondent Ross Hawkins, who is following the chancellor ahead of his speech on cuts later. He warns that Mr Osborne is not likely to give too much detail. "Don't expect a mini Budget."

    JP MORGAN FINE 0943:
    JP Morgan

    The New York Times and the Wall Street Journal are both reporting that another hefty fine may be around the corner for giant US bank JP Morgan Chase, this time relating to criminal and civil charges that it ignored signs of Bernard Madoff's multi-billion dollar scam. Quoting people familiar with the case, they say confirmation could come this week and the price tag is around $2bn (£1.2bn).


    The FTSE 100 little changed so far this morning - up just 2.5 points so far. The Dax in Frankfurt and the Cac 40 in Paris are both up about 0.1%. Earlier the Nikkei in Tokyo closed down 2.4%, while the Hang Seng in Hong Kong ended the day down 0.6%.

    BANK MACHINE 1000:
    Indian farmer

    There are just 98 bank machines for every one million people in India, representing a massive gap in the market for bank machine manufacturers, reports the New York Times. Right now, rural populations have to visit their bank branches in person to withdraw cash, and the closest outlet can sometimes be miles away.

    COMING UP 1006:

    George Osborne will be speaking in the West Midlands about plans for cuts and the economy shortly. The News Channel is covering it live.

    OSBORNE 1010:

    Chancellor George Osborne is speaking now. He opens his remarks by saying the economic recovery feels "abstract, remote" for many people. But he says Britain is now "back in control of [its] destiny".

    OSBORNE 1014:

    George Osborne says that, now the festive season is over, "2014 is the year of hard truths". He calls for more repairs, more cuts, more difficult decisions. He says the alternative is to "squander what we have achieved and go back to economic ruin".

    OSBORNE 1019:

    The chancellor warns that the welfare budget will be hit by planned cuts totalling £17bn this year and £20bn next year.

    OSBORNE 1021:

    "I don't want to condemn our country to ageing infrastructure," Chancellor Osborne says, as he defends high speed rail plans and exploration of shale gas resources.

    OSBORNE 1026:

    Chancellor Osborne says £12bn of further welfare cuts are needed in the first years of the next parliament. He says it's a "hard truth" that he cannot protect the welfare budget from cuts - it's the only alternative to cutting government departments further or increasing taxes. Or, borrowing more, he says.

    LISTEN AGAIN 1033: Radio 5 live

    If you missed this morning's Wake Up to Money you can listen back via the podcast. Adam Parsons and Mickey Clark discuss the bad news about UK debt, the good news about UK manufacturing, and speak to publishers HarperCollins about the future of the book industry.

    OSBORNE 1048: BBC News Channel
    Ross Hawkins

    The BBC's Ross Hawkins has just ditched his collapsing umbrella in a windy Birmingham, but not before telling us that Osborne's big news today is that half the £25bn in cuts needed after the election will come from the welfare budget rather than departmental spending.

    LISTEN AGAIN 1056: Radio 4

    Listen again to the business news from this morning's Today programme via the podcast. Simon Jack talks about rising business confidence and the plight of agency workers.


    The FTSE 100 is down again after moving in and out of positive territory this morning. It is currently 0.1% lower. The Dax in Frankfurt is up 0.1% while the Cac 40 in Paris is virtually unchanged. Earlier the Nikkei in Tokyo closed down 2.4%, after apparent profit-taking by investors.

    Turkish Airlines

    "Can the Mints join the top 10 largest economies in the world, after the US, China, the rest of the Brics and maybe Japan?" asks economist Jim O'Neill, who has been travelling around Mexico, Indonesia, Nigeria and Turkey for the BBC. "I think so, though it may take 30 years."

    Anders Bouvin

    "Thrillingly boring" - The BBC's Matthew Wall profiles Anders Bouvin, the Swedish banker who heads the most successful bank you've probably never heard of.

    ENERGY BILLS Via Twitter Douglas Fraser Business and economy editor, Scotland

    tweets: "Scottish Power confirms it's cutting bills from Jan 31, following govt reduction of non-energy add-ons. Average household dual fuel: -£54 pa"

    UK SERVICES 1155:

    The UK's services sector continued to grow in December according to the latest PMI data from research firm Markit, but at a slower place than in previous months. Regardless the economic outlook looks pretty good, according to Markit's chief economist Chris Williamson.

    SPENDING CUTS 1204: BBC News Channel

    The analysts are mulling over whether George Osborne's cuts are likely to damage the UK's economic recovery. "It might take some heat out of the growth rate," says Trevor Williams, chief economist at Lloyds. "But I don't think it will be enough to derail the recovery by itself."

    ENERGY BILLS 1218:

    Some more information about the lower prices announced by Scottish Power this morning. Most customers on fixed-rate tariffs will not be affected by the latest announcement. Also, the cuts will only partly offset an 8.6% tariff increase that came into force in December 2013. Scottish Power is the fifth utility to say it's reducing prices after the government announced changes to green levies.

    LISTEN AGAIN 1230: World Service

    Listen again to Business Daily from the World Service via the podcast to hear how one of the UK's top fund managers makes billions of dollars for his clients. Plus: Should we worry if our children don't land that top flight job first off? Lucy Kellaway of the Financial Times suggests you can learn some important life lessons flipping burgers and mopping floors.


    Still very little movement on the FTSE 100 at lunchtime, with London's key index just four points up. Meanwhile, the German Dax has moved up over 0.2% and in Paris the Cac 40 is up 0.1%.

    INTEREST RATES Via Twitter Simon Gompertz Personal finance correspondent, BBC News

    tweets: "Savers: March will bring the 5th anniversary of interest rates being at a rockbottom 0.5%"

    FIGHTER JET TEST Via Twitter Aaron Heslehurst Presenter, World Business Report

    tweets: "Britain's #BAESystems has test flown a #Tornado fighter jet w/parts that were made on a 3D printer!! OMG!! Means u can manufacture anywhere!"


    That's it from us for today, but we will be back tomorrow with all the business news headlines from 06:00.


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