1 July 2014 Last updated at 05:54

Business Live: Tuesday 1 July 2014

    05:59: Ben Morris Business Reporter

    Good morning! As expected France's biggest bank, BNP Paribas, was whacked with a gigantic fine by US authorities. Plus a management shake-up at M&S is attracting attention. Stay with the live page.

    06:00: Rebecca Marston Business reporter, BBC News

    We'll have our eye on that - and anything else that the morning throws at us. Here 'til 13:00. bizlive@bbc.co.uk, @bbcbusiness is how to talk to us.

    CHINA MANUFACTURING 06:00: Radio 5 live
    Chinese welder

    China's manufacturing activity grew at its fastest pace for six months in June. The official purchasing managers' index (PMI) rose to 51, from 50.8 in May. On Wake Up to Money the BBC's Sharanjit Leyl in Singapore says the economy is responding to efforts by the government to boost the domestic economy.

    HEATHROW 06:03: Radio 5 live
    Duty Free, Terminal 2

    Wake Up to Money is being broadcast from Heathrow Airport this morning. Everything is very big and very loud. Presenter Adam Parsons has been to the top of the control tower, where at least he had to whisper rather than shout. Bad weather and turbulence slow things down for air traffic control because pilots change course to keep passengers comfortable. Today is the first day on the job for the new chief executive, John Holland-Kaye.

    M&S Marble Arch

    Watch this name - Laura Wade-Gery . The Telegraph is touting her as a potential successor to Marc Bolland the chief executive of Marks and Spencer. She has been put in charge of M&S high street stores, having just overseen the revamp of the retailer's website.

    HEATHROW BAGGAGE 06:16: Radio 5 live
    Baggage handlers with a pile of Suitcases at Heathrow Airport.

    After thousands of passengers in recent days arrived without bags, new Heathrow boss John Holland-Kaye on Wake Up to Money is apologetic: "What's taken longer than it should have done is getting bags back to passengers. I'd like to apologise to passengers affected."

    LABOUR ECONOMY 06:23: BBC Radio 4

    Labour publishes more of its thinking on the economy and business today. Chief political correspondent Gary O'Donaghue on Today says Labour will try to address unbalanced growth by boosting city regions outside London by allowing them to keep revenue from business taxes. Evan Davis points out that the Conservatives have a similar policy. Labour's Lord Adonis is on Today after 07:00.

    ARGENTINA DEBT 06:31: Radio 5 live

    Is Argentina about to default on its debt repayments, asks Wake Up to Money? It's the second time in 13 years that Argentina has been facing default, says Nick Gartside, from JP Morgan Asset Management. But after missing a payment on Monday it has 30 days to meet a new deadline, he says. On Monday Argentina paid for a whole page in the FT to plead its case to investors.

    HEATHROW 06:36: Radio 5 live
    Plane flying over a Heathrow Airport sign

    Interviews with Heathrow representatives rarely happen without a plea for more capacity. New boss John Holland-Kaye tells Wake Up to Money: "It matters for Britain that we are at the heart of the global economy. The only way we can get to the global markets where growth is is by plane." We need that third runway, he concludes.

    INNOVATION 06:45: BBC Radio 4

    A man with more than £400m to invest in innovation is on Today: Iain Gray, the chief executive of the UK's innovation agency, the Technology Strategy Board. He says private sector investors have become more risk adverse but an endorsement by his organisation is a quality mark that they take notice of. He has taken eight UK robotic companies to the US to help them find opportunities.

    BNP PARIBAS 06:51: BBC Radio 4

    "Painful but by no means terminal," is how Nick Gartside of JP Morgan Asset Management characterises that massive fine for BNP Paribas. He says that given a general environment of tougher regulation, banks are retreating to their core areas and may boost domestic lending, which would make politicians happy.

    BNP PARIBAS 07:07:

    BNP Paribas has kicked off a conference call for investors, analysts and journalists. Chief executive Jean-Laurent Bonnafe is hosting. He expects no impact on operational activities for the vast majority of clients. A new department headquartered in New York will ensure that the bank complies with US sanctions. He "deeply regrets" past conduct that led to the settlement.

    GREGGS 07:15:
    Bread rolls

    Baking chain Greggs gives a good account of the last six months. The sausage roll trader says same-store sales are 3.2% higher - a big swing round from last year when they were 2.9% down.

    HEATHROW BAGGAGE 07:24: BBC Breakfast
    Steph and Simon

    What sort of compensation can you get if your luggage doesn't turn up - as happened to thousands of passengers using Heathrow recently? "You can get up to £1,100 if your baggage never turns up. Airlines will generally allow you maybe £100-200 for essentials but you have to keep all your receipts to make a claim," travel writer Simon Cauder tells Stephanie McGovern.

    BNP PARIBAS Via Twitter Sally Bundock Presenter, World Business Report

    tweets: "BNP chief executive Jean-Laurent Bonnafe says settlement with the US does NOT call into question solidity of #BNPParibas"

    GM logo

    The reputation of General Motors received another big dent late on Monday. It announced the recall of another 8.4 million cars - 7.6 million in the US. They are mostly cars manufactured between 1997 and 2014 and are being recalled for ignition switch defects. It takes the total number of recalls this year to a whopping 29 million cars - roughly three years of GM's global output.

    • BNP 'solid' enough to withstand fine
    • Heathrow boss sorry for baggage delays
    • Pound jumps on strong UK factory data
    ROAMING CHARGES 07:50: Radio 5 live

    Using your phone in another country will be cheaper from today. Matthew Howett, telecoms analyst at research company Ovum, tells Radio 5 live: "You are actually getting a good deal this time round. The cost of receiving a call and text will fall. Data is the key thing, The [European] Commission is reducing that by as much as 55% from what consumers were paying this time yesterday."

    LABOUR ECONOMY 08:00: BBC Radio 4

    Today has interviewed Lord Adonis who is behind Labour's growth review. The economy is not creating "productive, high skilled and well paid jobs", he says. Four out five net jobs since 2010 have been created in London. Other cities and regions should be allowed to keep more tax revenue to develop infrastructure and skills says Lord Adonis.

    BNP PARIBAS 08:06:

    Shares in BNP Paribas are up 3.4% following its $9bn settlement with US authorities for violating sanctions. It was also banned for a year from conducting certain dollar transactions.

    FLY TIPPING 08:14: Radio 5 live
    Fly tipping

    That scourge of the countryside, fly tipping, will get more expensive from today. Courts can now fine repeat offenders £2m. Cleaning up such mess cost authorities £40m last year. Phil Barton from Keep Britain Tidy urges householders to use builders and other tradesmen who have a "proper waste carrier licence".


    The markets have opened with modest gains. The FTSE 100 is up 9 at 6,753, in Germany the Dax is up 17 at 9,833 and the Cac 40 in France is 12 points higher at 4,435. BNP Paribas is up 2.5% following its settlement with the US authorities overnight.

    OCADO RESULTS 08:32:
    Ocado delivery van

    Delivery business Ocado has made a first-half profit of £7.5m before tax. That puts it on track for its first-ever annual profit. It has not made an annual profit since it was founded in 2000. Ocado shares are down 5%.

    HEATHROW BAGGAGE 08:47: BBC Radio 4

    "An interesting day to start your job as chief executive," admits Heathrow chief executive John Holland-Kaye on Today. He is referring to the computer system crash at Heathrow that caused thousands of bags to go astray. He says there are still a few thousand bags left - but they should be returned today.

    GERMAN JOBS 09:08:
    German parliament

    In Germany there's been an unexpected rise in the jobless total. The number of people out of work in June was up 9,000 to 2.916 million. Weather factors seem to be the cause of this, with mild winter weather meaning some work was finished earlier than usual. The jobless rate remains unchanged at 6.7%.


    The fallout continues from one of the most disastrous takeovers in recent corporate history. Shareholders of Hewlett-Packard (HP) have agreed to settle a lawsuit over the company's $11bn purchase of British software company, Autonomy shareholders were understandably upset back when, back in November of 2012, HP wrote off almost the entire value of Autonomy, just a year after buying it.

    Michael Lynch

    More on Hewlett Packard (HP). Lawyers representing HP shareholders will now join HP in the lawsuit against Autonomy executives who were in charge at the time of the takeover. They are suing, among others, Autonomy founder Michael Lynch (pictured), saying HP was misled about Autonomy's financial condition. Mr Lynch denies the claims, describing it as a "smear campaign".

    PAYDAY LENDERS Via Twitter Simon Gompertz Personal finance correspondent, BBC News

    tweets: "Payday lenders - from today they can't rollover your loan more than twice"

    German factory

    Eurozone manufacturing activity dipped in June, according to the latest data from Markit. The purchasing managers' index (PMI) fell back to 51.8, from May's 52.2. A reading above 50 though still indicates growth. Germany was the strongest country.


    There was much discussion among members of the Financial Policy Committee at their June meetings about the appropriate lending standards for mortgage providers. They were keen to tighten these because of concern the housing market could be heading for a bubble. But there was (gentle) disagreement over exactly how that should be done.

    MORTGAGE MARKET Via Twitter Ben Thompson Business correspondent, BBC News Channel

    tweets: "Bank of England policymakers considered opting for a lower loan-to-income ratio last week but allowing more mortgages above that level."


    UK manufacturing activity grew at its fastest rate in seven months in June - bringing with it new jobs. The Markit/CIPS UK Manufacturing PMI showed jobs were being created at their fastest rate in more than three years. The index was at 57.5, up from May's 57.

    POUND JUMPS 10:16:
    Pound dollar

    A strong report on UK manufacturing activity caused the pound to jump above $1.71 against the dollar and to hit its highest level since October 2008. Traders are betting that strong economic data will increase the chances of an early rise in interest rates. And higher interest rates will boost the pound.


    Unemployment in the eurozone fell by 28,000 in May according to data from the Eurostat statistics agency. The rate stands at 11.6%, unchanged from the revised April figure. The youth unemployment rate in the Eurozone stood at 23.3% in May - Greece and Spain have youth unemployment rates of well over 50%.

    ROAMING CHARGES 10:39: BBC World News

    The cost of accessing the internet from your smartphone while travelling in Europe falls dramatically from today. Samuel Gee from Mintel tells World Business Report that it is the latest phase of reform that started in 2007 and has seen the price for roaming calls, texts and data fall by 80%.

    Brompton bicycle factory

    UK labour productivity was little changed in the first quarter of 2014, said the Office for National Statistics (ONS). Output per hour grew by 0.2% in the first quarter in service industries, and by 0.5% in production industries. Wage costs fell in manufacturing. The Bank of England, among others, is concerned about the low rate of productivity in the UK compared with other countries.

    MORTGAGE MARKET Via Email Kevin Peachey Personal finance reporter, BBC News

    The Bank of England's Financial Policy Committee minutes reveal today that members will be keeping a close eye on the buy-to-let market. At the moment that sector has been spared the restrictions applied to residential mortgages. So don't rule out similar limits for buy-to-let properties.

    • Tata Steel cuts 400 Port Talbot jobs
    • Pound jumps on strong UK factory data
    • BNP 'solid' enough to withstand fine
    TATA STEEL CUTS 11:11:
    Port Talbot steelworks

    Tata Steel has announced that around 400 jobs will be cut at its Port Talbot operations. In a statement the company said steel demand and prices are likely to be under pressure "for some years". It also said business rates are much higher in the UK than elsewhere in Europe and UK energy costs, are at the moment, "uncompetitive".

    Via Email

    Industry body the EEF is not surprisingly pleased with the latest PMI. Lee Hopley, its chief economist at EEF, emails: "The latest PMI continues the positive run for manufacturing seen so far this year and, the pick-up in activity in June signals a strong second quarter... we should be encouraged that new orders from overseas markets are now coming through." Clearly, not everyone is thriving. See Tata.


    The markets have opened with modest gains. The FTSE 100 is up 30.39 at 6774.33, in Germany the Dax is up 32 at 9865 and the Cac 40 in France is almost 30 points higher at 4452.14. BNP Paribas is now up 4% following its settlement with the US authorities overnight.

    UK POVERTY 12:00:
    Hand with coins

    The number of people in relative poverty fell by 100,000 over the year to 9.7 million. The figures come from the Department of Work and Pensions. The Government said the annual poverty statistics also showed the number of people in poverty in work fell by 200,000. Ministers said the percentage of people in relative poverty was at the lowest level since the 1980s.

    Via Twitter Simon Gompertz Personal finance correspondent, BBC News

    tweets: "New ISAs - £15,000 annual limit for tax free savings from today. Note to self: find 15 grand somewhere..."

    BNP PARIBAS 12:27:
    BNP Paribas building

    Does the US come down harder on European banks like BNP Paribas when they have broken the rules, asks Jamie Robertson? Read more on this here.

    Tesco trolley

    Tesco and Morrisons continued to lose market share over the last three months, according to a report from research firm Kantar Worldpanel. Tesco's market share fell to 28.9% from 30.3%, Morrisons' was down from 11.7% to 10.9%. Asda and Sainsbury's both saw their share of the grocery market increase.

    DOUBLE DIP 12:37:
    Body with pants down

    La Senza, the high street underwear chain, is reported to be in administration for the second time in two years. Retail Week reports that more than 750 jobs are at risk.

    L'OREAL AD BLOCK 12:52:
    L'Oreal headquarters in Paris

    Cosmetic giant L'Oreal says it will stop claiming products prevent signs of ageing to stave off legal action from the US Federal Trade Commission. L'Oreal said one product, "Youth Code" used "gene science" to make skin look younger. "It would be nice if cosmetics could alter our genes and turn back time," said Jessica Rich, director of the FTC's Bureau of Consumer Protection, "But L'Oréal couldn't support these claims."

    ROBOTS 12:54: BBC Radio 4

    "Robots are going to impact almost every aspect of our lives," says Professor David Lane on Today. In particular they will do "dull, dirty and dangerious jobs" he says. The UK can lead the industry because we have a "fantastic research base" and are very good at software, algorithms and machine learning systems.

    13:01: Rebecca Marston Business reporter, BBC News

    That's it for a morning of business news that went from banks to bras to baggage. Back tomorrow. See you from 06:00 for whatever else comes up.


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