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Summary

  1. Get in touch: bizlivepage@bbc.co.uk
  2. FTSE posts ninth consecutive record close
  3. Labour leader Jeremy Corbyn calls for salary cap
  4. Morrisons hails strong Christmas sales
  5. Southern rail and BA cabin crew on strike again

Live Reporting

By Chris Johnston

All times stated are UK

Get involved

Good night

That's it for another day on the Business Live page.

Do join us again tomorrow at 6am when we'll keep you posted on all the latest news, views and analysis from the world of finance. 

Palau to go posh to cut tourists

The beautiful Pacific island state of Palau is a dream destination for anyone. However, if its president has his way, only the creme de la creme will be able to visit.

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Wall Street treads water ahead of results

Wall Street sign
Getty Images

There was little change in US shares at the close on Tuesday ahead of a raft of  company results in the coming weeks.

The Dow Jones was down a shade at 19,855.53, that's a fall of 31.85 points or 0.16%. 

The S&P 500 was unchanged at 2,268.90.

And the tech-heavy Nasdaq was up 20 points or 0.36% at 5,551.82.

Since Donald Trump's election victory US shares have soared. 

Now, though, investors have switched their attention to the results season to determine whether companies' performance actually justifies such high values. 

"We've shifted from that exuberance post the election and the rotation into some of the sectors and now we are entering a wait-and-see mode with earnings knocking at the front door," said Art Hogan, chief market strategist at Wunderlich Equity Capital Markets in News York. 

"Earnings may be the pivot to move things higher." 

Get into the groove

Barack Obama
Getty Images

President Barack Obama recently joked that he was hoping for a job at Spotify when he leaves the White House.

And it seems the music streaming service is keen to oblige him, after it posted on its careers page a vacancy for "President of Playlists."

The job ad says applicants should have "at least eight years' experience running a highly-regarded nation".

It also calls for "a friendly and warm attitude, and a Nobel Peace Prize".

Read more here.

Why inequality still matters...

Adding up Obama's legacy

Giving it away

Ian Pollock

Business reporter

New York Times
New York Times

Still in the US, the New York Times brings us this story about a billionaire who has given away $8bn during his life.

Apparently 85-year-old Charles Feeney ("Chuck" to his mates) gave his whole fortune more than 30 years ago to Atlantic Philanthropies.

He had set up that organisation as an umbrella for a group of private foundations.

The money kept growing thanks to being invested in companies such as Facebook and Alibaba.

'Good news' for VW

VW sign
Getty Images

Analysts at Evercore say the draft VW deal is intended to draw a line under all remaining US-related legal risk, which is "good news". 

"We had a $3bn number in mind, but in the broader scheme of things we believe the most important news is that VW managed to come to an agreement that allows the company to move on from here. It’s a major relief that this doesn’t get dragged into the new US administration."

They add: "We assume that VW will increase its diesel provision in the area of €2-3bn to about €20bn to €21bn... Of course there are plenty of other items driving the size of the provision such as number of customers selling their car back to VW."

The 'diesel issue'

Ian Pollock

Business reporter

VW engine
AFP

VW's statement is a masterpiece in not, in fact, telling the reader why it is set to cough up so much money to the US authorities.

The statement from the company refers - and only once - to what it coyly calls the "diesel issue".

Here is the only mention that VW cares to make of its scandalous behaviour in deliberately installing software in its car engines so that they could deceive the emissions controls of the US authorities:

"The aim of the discussions is to reach a settlement agreement regarding the settlement of certain criminal investigations and certain civil fines in connection with the Diesel issue in the USA," VW says.

Big bill

So to put that last paragraph from VW into English, the $4.3bn fine means that the total costs associated with the emissions cheating scandal are set to exceed the $19.2bn the company has set aside to handle the problem.

VW has already agreed to a $15b civil settlement with environmental authorities and car owners in the US.   

More financial pain awaits

The four-paragraph statement from VW issued tonight adds:

"In case of a settlement agreement, the payment obligations are expected to lead to a financial expense that exceeds the current provisions. The concrete impact regarding the annual result 2016 cannot be defined at present due to its dependency on various further factors."

Guilty plea

The Volkswagen settlement includes a guilty plea by the German company regarding certain US criminal law provisions and a statement of facts on the basis of which the fines have to be made, VW said. 

BreakingVW to pay $4.3bn for emissions cheating

VW
Getty Images

Volkswagen will pay a $4.3bn fine to settle the US criminal case surrounding the emissions cheating scandal known as "dieselgate".

The German company said it was in advanced talks with the US Justice Department and Customs and Border Protection to settle the criminal investigations and civil fines, but it was subject to approval by VW's board. 

That approval could come later today. 

Were Schultz and Sandberg in the frame?

Fascinating report by Mike Allen of Axiom AM about who could have been tapped up for a Clinton cabinet...

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'Focus on the long term'

Morrisons
Getty Images

Laith Khalaf, senior analyst at Hargreaves Lansdown, says today's FTSE rally was given an unexpected boost today in the form of the supermarkets, after Morrison issued a positive Christmas trading statement.

"While the FTSE 100 stands at a record level, valuations on the UK stock market are not at abnormally high levels once you factor in the earnings produced by UK companies. What’s more, the headline index doesn’t account for dividends, which are a key element of returns from the UK stock market, and are particularly attractive when interest rates are so low," he says.

"As ever, the short term could bring feast or famine, but either way investors should keep focused on the long term, which is where the stock market really comes into its own."

Department for International Trade appointment

Liam Fox's department has a new chief mandarin.

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GM profits motor higher

GMC Terrain
Getty Images

General Motors says it expects to post higher profits next year, countering analysts' concerns that the US car industry peaked in 2016 after several years of record or near-record sales. 

The company also announced a $5bn increase to its share buyback program and additional cost savings of $1bn. 

America's biggest car maker said sales of more profitable crossovers, trucks and SUVs (such as the new GMC Terrain, pictured) would "increase significantly" to 52% of sales volumes by 2020, compared with 38% over the previous six years.

Lord Hill

The UK's former EU commissioner warns against a "dialogue of the deaf" during Brexit negotiations.

Read more

Sterling to hit $1.20?

Sterling
Getty Images

Sterling recovered from a slide to two-month lows against both the dollar and euro to end marginally higher today as a week of worry about Brexit plans kept the currency under heavy pressure. 

Morning trade saw the pound add to losses of more than 1% suffered on Monday, before it steadied above $1.2100 and 87.50 pence per euro. 

Some analysts think it has further to fall, such as Viraj Patel at ING FX: "The market is just piling in to sterling shorts following Theresa May's comments and given that we are expected to get a pick up in Brexit noise. We could even get a test of the $1.20 level in the next couple of weeks."  

Corbyn uncapped

Jeremy Corbyn
Getty Images

Speaking of money matters, Jeremy Corbyn told Radio 4 this morning he was in favour of a wage cap for the UK's top earners.

However, in his speech in Peterborough this afternoon he listed a series of alternative ways to tackle pay inequality - with no mention of a cap.

We could allow consumers to judge for themselves, with a government-backed kitemark for those companies that have agreed pay ratios between the pay of the highest and lowest earners with a recognised trade union. We could ask for executive pay to be signed off by remuneration committees on which workers have a majority. We could ensure higher earners pay their fair share by introducing a higher rate of income tax on the highest 5% or 1% of incomes. We could offer lower rates of corporation tax for companies that don't pay anyone more than a certain multiple of the pay of the lowest. There are many options. But what we cannot accept is a society in which a few earn in two days and a bit, what a nurse, a shop worker, or a teacher do in a year. It simply cannot be right."

Unite takes aim at M&S

BA plane
Getty Images

The striking BA cabin crew belonging to Unite plan to up the ante tomorrow by handing in a letter to Marks and Spencer head office, calling on the retailer to support its campaign. 

The union said the second day of the strike coincides with a roll-out of a new M&S food range on short-haul flights across British Airways. 

Unite national officer Oliver Richardson said: "Cabin crew working for British Airways' 'mixed fleet', 36,000 feet up in the air, face earning up to £6,000 less basic pay than M&S staff selling the same food in store."

BreakingAnother FTSE record

Anglo American mine
Anglo American

It's another record close for the FTSE 100 at 7,275 points - that's the ninth in a row for the blue-chip index. 

Miners dominated the risers today, with Anglo American soaring more than 7%, although Tesco gained almost as much. 

Insurers Direct Line and Admiral were the two biggest fallers.

The pound, meanwhile, is flat at $1.2167.

Worse than Black Wednesday...

Press Association data journalist Ian Jones has been number crunching the slide in sterling:

View more on twitter

BA cancels 22 flights

BA planes
Getty Images

As well as the strike on Southern trains today, British Airways cabin crew belonging to the Unite union have also walked out today and tomorrow.

The airline said 22 flights to and from Heathrow airport were cancelled today because of the strike out of 800 in total. 

Affected destinations include Hamburg, Dusseldorf, San Jose, Oslo and Aberdeen, but flights have been merged so passengers will be able to reach their destinations, BA said.

Salary cap is 'completely idiotic'

BBC News Channel

David Blanchflower
BBC

David Blanchflower is a former member of the Bank of England Monetary Policy Committee and was briefly an economic adviser to Jeremy Corbyn. Following the Labour leader's comments earlier today about imposing a salary cap, he's given a forthright interview to the BBC News Channel.

The economist says a salary cap is a "completely idiotic idea" that firms could easily get around. It was "another silly idea" from Mr Corbyn that would be "completely unworkable" in a market-driven economy like the UK's.

Just in case we didn't get the message, Professor Blanchflower adds that a cap would be a "totally lunatic" idea.

BreakingNew BBC chairman

David Clementi
BBC

The Department of Culture. Media and Sport said that Sir David Clementi has been confirmed as the BBC's new chairman, after approval from Downing Street.  

Is inequality in the UK getting worse?

Reality Check

Jeremy Corbyn saying: We cannot go on creating worse levels of inequality.
BBC

The claim: Levels of inequality in the UK have been getting worse. 

Reality Check verdict: Official figures suggest that income distribution has become less unequal over the past decade.

Read the full Reality Check here.

No tears for Boohoo

Boohoo
Boohoo

Business live reader Iain Thomson emails to ask if we will be covering the trading updates from some of the online retailers this week, such as Boohoo.com. That plucky upstart did indeed slip through the net this morning, but is certainly worth a mention.

The youthful fashion purveyor has upgraded its full-year revenue forecasts following a bumper Christmas trading period. Boohoo sales for the four months to December 31 rose 55% to £114m, driven by a 31% increase in UK sales to £65m. 

As a result, boohoo expects sales growth of between 43% and 45% in the year to February 28 - above previous guidance of between 38% and 42%.

Shares have risen by - wait for it - almost 300% in the past 12 months (we should all have listened to retail analyst Nick Bubb, who made Boohoo his 2016 share tip) and it's now worth more than £1.6bn.

Trump tweets!

I knew I wouldn't have to wait too long! The first tweet this shift from Donald Trump has arrived... 

However, it's only a retweet, rather than a rant. I feel a bit shortchanged. Must try harder Mr President-elect!

View more on twitter

Spencer sells out

Former Tory party treasurer Michael Spencer is about £200m richer after offloading most of his shares in what is now called TP ICAP. 

Icap, Mr Spencer's company - which is now known as NEX Group - bought Tullett’s electronic broking arm as part of a swap deal that gave him a 9% stake in TP ICAP.

That holding is now down to about 1%.   

VW motors on

Volkswagen concept car
Getty Images

Scandal? What scandal... "Dieselgate" does not appear to have done Volkswagen too much reputational damage, given that it says it managed to flog a record 10.3 million cars worldwide last year.

The VW group, which also owns Audi, Porsche and Skoda, increased sales by 3.8% compared with 2015, pushing it back over the magical 10-million mark after slipping to 9.93 million in 2015. 

Sales of VW-branded cars rose 2.8% to nearly six million units. 

BBC chairman decision

ITV political editor Robert Peston tweets: 

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BreakingTraders to be charged

Reuters reports that US authorities will charge three former traders at JPMorgan, Citigroup and Barclays in relation to a foreign exchange investigation, according to a source.

Ryanair overtakes Lufthansa

Ryanair plane
Getty Images

Bit of a moment for Ryanair - last year it was well and truly Europe's biggest airline by passenger numbers. Last week the Irish carried said it had 117 million passengers in 2016 - up 15%. Today Lufthansa reported a 1.8% rise in its annual total to 109.7 million.

Other budget carriers also did well, with Norwegian Air Shuttle reporting a 14% rise to 29 million and Wizz Air up 19% to 22.7 million. 

EasyJet, which suffered more than low-cost rivals from strikes in France and tourists avoiding destinations hit by attacks, increased passenger numbers 6.6% to 74.5 million. 

Good afternoon!

Chris Johnston

Business reporter

Thanks to Russell and Dearbail for keeping us up to date thus far today. I'm with you for the rest of Tuesday's business news and views - and doubtless a Trump tweet or three.

Got a comment on anything that's happened today? Email me at bizlivepage@bbc.co.uk or follow me on Twitter: @cajuk

Nuclear countdown

BBC industry correspondent tweets:

Fear and stealing in Las Vegas

Three-screen laptop
Razer

A big scandal has emerged at the CES tech show in Las Vegas. A gaming laptop with three screens has been stolen. 

Razer, the maker of the first of its kind portable laptop, is offering a $25,000 reward for any information that leads to an arrest.

Read all about it here.

Volkswagen sales rise despite scandal

Skoda
Getty Images

Drivers appeared to shrug-off Volkswagen's emissions scandal and sent full-year sales of vehicles up by 3.8% last year.

The embattled group delivered 10.3 million cars in 2016. In December alone, sales increased by 11.8% to 933,300 vehicles.

Europe as well as China showed strong demand but sales were flat in North American and down in South America.

Its commercial vehicles were the best sellers over the year, up 11.4% while the once much-vilified Skoda reported sales up 6.8%.

The emissions scandal shows little sign of abating. On Monday, court papers emerged claiming that some Volkswagen executives knew about the cheating two months before it emerged but decided not to tell US regulators.