a new chapter. uk prime minister keir starmer hosts european leaders for talks as his government pledges to reset relations with the eu. my my government will seek to reset the relationship with the european partners and work to improve the united kingdom trade and investment relationship with the european union. also to come, the chips are down. $500 billion wiped off the value of semiconductor firms on wall street on fears the us will step up its tech trade war with china. and from bit to qubit, we go inside the mind boggling world of quantum computing. welcome to business today. i'm vishala sri—pathma. we start here in the uk where the new government has been setting out its priorities, delivered

in a speech by king charles at the state opening of parliament. as well as pledges on economic growth, transport, energy and housebuilding — the government says it's seeking to rebuild relations with the european union after years of tensions since the uk voted to leave the bloc in 2016. my my government will seek to reset the relationship with european partners and work to improve the united kingdom's trade and investment relationship with the european union. my ministers will seek any security pact to strengthen cooperation on the mutual threats faced by the united kingdom and the european union. well, prime minister sir keir starmer will have an opportunity to start that process as he hosts dozens of european leaders at blenheim palace in oxfordshire, the ancestral home and birthplace of winston churchill.

on wednesday he met with irish taoiseach simon harris for talks ahead of the meeting of the european political community — a group which brings together the leaders of the 27 eu nations and 20 non—eu nations twice a year to discuss issues like security. allie renison is associate director at the research and lobbying firm sec newgate uk. she was formerly a government adviser and head of eu and trade policy at the institute of directors. thanks forjoining us. this is an interesting meeting for keir starmer, a chance for him to set out his agenda of his relationship with europe, really. relationship with europe, reall . �* ~ relationship with europe, reall. �* ~ , relationship with europe, reall . �* ~ , , really. and i think it is very helful really. and i think it is very helpful this _ really. and i think it is very helpful this is _ really. and i think it is very helpful this is what - really. and i think it is very helpful this is what some l really. and i think it is very - helpful this is what some might call an eu plus meeting effectively. nearly 50 countries, ve represented by the president of the council and set up as a brainchild of a manual micron, trying to reconnect the eu to other european countries that share similar values, european countries that share similarvalues, belarus european countries that share

similar values, belarus and russia excluded. very often i think the focus is on support for ukraine and given as heard in the speech, the prime minister wants to focus on a security pact a perfect opportunity to get the ball rolling. opportunity to get the ball rollina. , ,., opportunity to get the ball rollina. , ., , rolling. these sort of meetings tend to focus _ rolling. these sort of meetings tend to focus on _ rolling. these sort of meetings tend to focus on security - tend to focus on security because of what is going on in the ukraine. wejust had the republican national convention where there is lots of talk about america pulling support out of ukraine. that presumably will dominate talks. i out of ukraine. that presumably will dominate talks.— will dominate talks. i think if the are will dominate talks. i think if they are wise, _ will dominate talks. i think if they are wise, that _ will dominate talks. i think if they are wise, that is - will dominate talks. i think if they are wise, that is likely l they are wise, that is likely to happen. the us potential trump presidency won't be mentioned by name but i think it will be be relevant in their room. we have seen trump �*s new vice president picked jd vance, he is what some might call the thinking man's trump and has very strong views on limiting us support for conflicts abroad. that will be something underpinning and incentivising european leaders to try and come together to find a

solution in the way forward on how they can do that. in terms of aligning _ how they can do that. in terms of aligning its _ how they can do that. in terms of aligning its a _ how they can do that. in terms of aligning its a bit _ how they can do that. in terms of aligning its a bit closer- how they can do that. in terms of aligning its a bit closer to i of aligning its a bit closer to europe which is what keir starmer has said he wants to do, how is he going to go about doing that in terms of business for example?— doing that in terms of business for example? that is something that may not — for example? that is something that may not be _ for example? that is something that may not be on _ for example? that is something that may not be on the - for example? that is something that may not be on the agenda l that may not be on the agenda because i was there but is more of a bilateral discussions with the winner in terms of the reset of the village with europe, he wants to look at improving trade relations, he has made clear prior to the election labour have redlines which i think is a brexit overhang was that it doesn't want the uk to join the customs union or interest free movement of people but wants to intrude —— improve trade restrictions for the particularfor —— improve trade restrictions for the particular for the agriculture sector whether a high trade barriers. looking at other errors about recognition for service providers. it won't necessarily be the focus of this summit but does lady barron work —— lady groundwork. that is key, laying the

groundwork. these negotiations take a while.— take a while. they do. we have to note the _ take a while. they do. we have to note the european _ take a while. they do. we have i to note the european commission that drives a lot of negotiations on behalf of eu countries and eu member states is onlyjust being set in place after the recent eu elections. they have to set their own priorities. the commission in brussels that previously in the last few weeks they think it is in the uk courts this forward. they called surprise in the uk because we are now past brexit and want to .it . it that this is a new government acting in good faith. ., ~ government acting in good faith. . ~ ., government acting in good faith. . ., ., faith. thank you for “oining us. let's turn to the markets now and a big figure to get your head around. $500 billion. that's the amount wiped of the shares of chip companies on wall street on wednesday in the biggest sell—off the sector has seen since march 2020, at the start of the pandemic. stoking the tech turmoil — fears that the us is about to

ramp up its technology trade war with china. mariko 0i is following this for us in singapore. thanks forjoining us. a bit of a fall from grace.— a fall from grace. absolutely. the biggest _ a fall from grace. absolutely. the biggest chip _ a fall from grace. absolutely. the biggest chip seller - a fall from grace. absolutely. the biggest chip seller in - the biggest chip seller in almost 4.5 years. those shares have been doing so well thanks to the ai boom in recent years but it was a number of developments that sent a shock throughout the sector sparked byjoe biden and donald trump. firstly, the biden administration is reportedly considering tighter restrictions on exports of advanced semiconductor technology to china. in that sense, as was the tech heavy nasdaq form by ai darling sites like nvidia and apple and the other development is investors got rather nervous when the republican presidential candidate donald trump said

taiwan did take about 100% of our chip business and that it should pay the us for its defence. taiwan produces most of the world �*s advanced chips. those comments have been weighing on taiwanese chip giants like tsmc as well as other asian tech giants but the question is did taiwan really take the chip business from the us? research says no. the reality is — us? research says no. the reality is i _ us? research says no. the reality is i think _ us? research says no. the reality is i think a - us? research says no. the reality is i think a lot - us? research says no. the reality is i think a lot of - reality is i think a lot of trumps, _ reality is i think a lot of trumps, tell based on the fact it does— trumps, tell based on the fact it does not really totally understand the semiconductor business — understand the semiconductor business because at play such an enormous role in building these — an enormous role in building these chips and by the way sending _ these chips and by the way sending them out to other places. _ sending them out to other places, the devices may be built— places, the devices may be built in— places, the devices may be built in taiwan but goes into equipment from apple and dell and other us companies and you cannot_ and other us companies and you cannotjust take that and other us companies and you cannot just take that out of taiwan— cannot just take that out of taiwan overnight. these things take _ taiwan overnight. these things take years and years and years. the fundamentals have not changed and the fundamentals are still— changed and the fundamentals are still strong and will continue to be, regardless of

the election outcome. not only do they have — the election outcome. not only do they have american - the election outcome. not only i do they have american customers like apple and nvidia but also spending billions of dollars building new factories overseas as well including $65 billion on preplanned in the us state of arizona. also as for mr trump �*s comments that taiwan should pay the us for its defence, china state media outlet with global times called it a slap in the face to be ireland's authorities while taiwan �*s premiere has said it is willing to shoulder more responsibility for its defence. it goes to show how asian companies and economies are now starting to get affected by comments of mr trump just as there were raw of five years ago. there were raw of five years auo. . ~' there were raw of five years auo. . ~ , ., there were raw of five years am, ., ~' , ., , , ago. thank you, deftly seeing the reverberations _ ago. thank you, deftly seeing the reverberations in - ago. thank you, deftly seeing the reverberations in be - ago. thank you, deftly seeing l the reverberations in be market particularly in the tech industry. wall street analysts say that the sell—off in the chip sector also marks a shift by investors back towards traditional economy companies

after the huge gains seen in tech shares. what you are seeing is a pullback in the big technology names which normally would not mean much but when you have such a narrow rally up until now, not too long ago, sikki % was driven by seven stocks. and big tact of his levels when you see pullback like what you were seen from july five, and video, microsoft, amazon, down four, five and six. facebook, down 13. that is a moment. we are looking for a broad market change and you are starting to see the rotation. rotation out of the big names into areas we were talking about for a while now. small caps.— were talking about for a while now. small caps. let's look at the cost of— now. small caps. let's look at the cost of borrowing - now. small caps. let's look at the cost of borrowing now. - because the prospects of a cut in uk interest rates next month

appear to be fading after signs that inflation is proving hard to get under control. consumer price inflation remained at 2% injune. that's where the bank of england wants it to be. but inflation in services that includes things like the hospitality sector and entertainment was still running at 5.7% and that could mean the bank keeps interest rates higher for longer. all eyes now turn to frankfurt, where the european central bank holds its latest policy meeting. joe nellis is professor of the global economy at the cranfield school of management here in the uk. this is interesting because it was expected to be 1.9% uk inflation yesterday on wednesday. it came out at 2% but within the target. does that really impact the decision, given that we have seen central banks in europe and the us saying aleksei does not need to be on target for rates to be cut.— rates to be cut. would have been better— rates to be cut. would have been better induced - rates to be cut. would have been better induced if - been better induced if inflation had come down below the 2%. this is a marginal

call. the next reading of the mpc is on the first of august. i think it will be a close call. i had not they would cut them but i think they might just wait until the september beatings just to be sure of the underlying inflation rate is on the way down and of course we saw yesterday it stuck at 5.7% for the service sector. i think we have another month or two before we can be certain but you never know. august one as possible. you never know. august one as ossible. ~ , , ., ., possible. why is it inflation is proving _ possible. why is it inflation is proving to _ possible. why is it inflation is proving to be _ possible. why is it inflation is proving to be particularly sticky in the uk and also in the us? ., sticky in the uk and also in the us? . ., the us? imagine that the service sector, _ the us? imagine that the service sector, i - the us? imagine that the service sector, i think- the us? imagine that the | service sector, i think that the us? imagine that the i service sector, i think that is the answer. this service sector, costs are dominated by the labour market and wages are still rising on average by about 6%. the reason for this is we have a labour shortage in the uk. an earlier item regarding europe and brexit, let's not rehearse that again

but we have got a labour problem and going forward, as the economy begins to grow more and we all hope there will be more growth, the problem is that will create more labour shortages. theyjust want that will create more labour shortages. they just want to that will create more labour shortages. theyjust want to be sure that wages come under better control and i think that will take a little while yet. there is also over is a living it's too late.— there is also over is a living it's too late. absolutely. and there is the _ it's too late. absolutely. and there is the double-edged i there is the double—edged sword. the economy, while it is growing, it is growing slowly. if they do wait too long, you're absolutely right, it could off the recovery we are beginning to see. we are at this turning point a little bit of patience, some hope at things could submit to go in the right direction. i think m3 orfour months time, the right direction. i think m3 or four months time, things will look a lot better provided we can also keep ourselves under control and not get too carried away. we under control and not get too carried away-—

under control and not get too carried away. we had from the international _ carried away. we had from the international monetary - carried away. we had from the international monetary fund i carried away. we had from the international monetary fund a | international monetary fund a few days ago talking about how interest rates across the globe are going to stay higher for longer. itjust think are going to stay higher for longer. it just think that because as the outlook for growth, but does appear to be realised down a little as well. the main cause for inflation over the last couple of years has been primarily due to international factors, has been primarily due to internationalfactors, the tension in the middle east, situation in the ukraine and those have not gone away. i think they are expressing possibly because until those external sources begin to diminish, we have to hold our breath and hope things get better. as i say, let's not exaggerate. we are going in the right direction but it may take a little longer to get there then we hoped for.- a little longer to get there then we hoped for. what are we exectin: then we hoped for. what are we exoecting from _ then we hoped for. what are we expecting from them? - then we hoped for. what are we expecting from them? probably | expecting from them? probably aet expecting from them? probably get another _ expecting from them? probably

get another quarter _ expecting from them? probably get another quarter %. - expecting from them? probably | get another quarter %. europe's economy is in a bit of a problem. germany being the biggest player has been in recession and i think they really do want to kickstart the european economy. i think that will probably happen in the next three orfour will probably happen in the next three or four months but i think they will give it a bit of a stimulus. i am expecting a cut but again, when you're at this turning point, can go either way, this turning point, can go eitherway, it this turning point, can go either way, it will be a close call but let's wait and see. service in place in europe is clever 4% wage increase is about 5%. would you say they in better shape compared to the us or the uk? i better shape compared to the us or the uk? ., ., better shape compared to the us or the uk?— or the uk? i would not say in better shape _ or the uk? i would not say in better shape in _ or the uk? i would not say in better shape in terms - or the uk? i would not say in better shape in terms of - or the uk? i would not say in better shape in terms of the | better shape in terms of the economy. in terms of inflation, yes, slightly better but europe has its own internal problems regarding labour markets. i would not said in better shape but all the talk about politicians saying we are doing better than them and they are

doing better than us, doesn't really matter to those in the uk or in europe, it is what is happening in their own account that matter and i think we are at this difficult turning point for all economies including the us, although the us is going along quite nicely.— us, although the us is going along quite nicely. not long to find out what _ along quite nicely. not long to find out what the _ along quite nicely. not long to find out what the european - find out what the european central bank decides. thanks forjoining us. let's get some of the day's other news now. shares of beyond meat slumped some 13% in after—hours trading after the wall streetjournal reported the firm is in restructuring talks with bondholders. beyond meat supplies plant—based burgers, sausages and ground beef to chains including mcdonald's as well as selling direct to consumers. but it has been burning through cash because of weaker demand for its products. a 150—million—year—old stegosaurus skeleton has become the most valuable fossil ever sold at auction. the dinosaur, known as apex, fetched $4116 million

at sotheby�*s in new york — ten times more than expected. its buyer is officially anonymous but the financial times has named him as ken griffin, founder of the citadel hedge fund. coming up: from bit—to qubit. we go inside the mind—boggling world of quantum computing. around the world and across the uk, this is bbc news.

let's return to the uk economy because the new government has pledged to get more people into work as well as boosting skills and enhancing employment rights for workers. the uk has faced a shortage of skilled workers, pushing up wages and adding to inflation. last month officialjobs data showed the highest level of inactivity in almost a decade with more than a fifth

of working—age people classed as not actively looking for work. we get the latest figures in just over an hour. michael stull is managing director of manpowergroup uk. thanks forjoining us. what are we to expect from these figures?— we to expect from these fi . ures? , , ., we to expect from these fiaures? , , ., , figures? very interested to see what comes — figures? very interested to see what comes out. _ figures? very interested to see what comes out. we _ figures? very interested to see what comes out. we saw - what comes out. we saw inaudible the group, we saw this pumping of the brakes on the labour market that has turned into a much harder stop injune. some of that was the hiring manager is waiting on the election to see where it went, but some is the continued slowdown in the labour market. i think we will see that in the numbers and also see workers are moving less. the great resignation has turned into the big stage. the other thing i'm

very interested in seeing is what is going on with wage inflation. i expect to see that still pretty high. wages are still pretty high. wages are still pretty high. wages are still pretty high, vacancy is still pretty high, vacancy is still pretty high, which speaks to the skills shortage you mentioned and then the big question will be have we tip the scales too far inaudible and employment market will hinder growth versus what will come out in the second half of the year. in come out in the second half of the ear. , ., come out in the second half of the year-— the year. in terms of skilled workers which _ the year. in terms of skilled workers which you - the year. in terms of skilled j workers which you mention, the year. in terms of skilled - workers which you mention, and something we mentioned in our introduction, there is a shortage. keir starmer was quite emphatic about getting people skilled up and that was the solution to lots of problems including growth and curbing immigration. how will you go about doing that do you think? , think? the devil will be in the details, but — think? the devil will be in the details, but for _ think? the devil will be in the details, but for me _ think? the devil will be in the details, but for me the - think? the devil will be in the details, but for me the best l details, but for me the best way to go and up skill the

country is to make sure we have very practical skilling programmes. i think the apprentice levy has been difficult to use, so you do not really get to see that, so if we made that more flexible we would get improvement. then in general and industrial strategy focusing on growth areas which will stimulate investment, but it will come down to making sure we have business working with the government and educators altogether because it takes all of us to be able to up takes all of us to be able to up skill workers into the next economy. he up skill workers into the next economy-— up skill workers into the next econom . . , , economy. he has this meeting today with _ economy. he has this meeting today with european _ economy. he has this meeting today with european leaders. l economy. he has this meeting l today with european leaders. do you thinkjobs and working relationship with the european neighbours of the uk is probably going to be a priority for him or with security being so important as well, inaudible

agenda but do you think that will be part of the conversation? i will be part of the conversation? ~ conversation? i think part of the conversation _ conversation? i think part of the conversation will - conversation? i think part of the conversation will be - conversation? i think part of the conversation will be how conversation? i think part of. the conversation will be how we can work much closer together to be able to compete in the global economy. some will have two do with skills, some will have to make work easier for employers to make sure we get trade, we get migration across certain quarters.— certain quarters. michael, thank you _ certain quarters. michael, thank you very _ certain quarters. michael, thank you very much - certain quarters. michael, thank you very much for l certain quarters. michael, - thank you very much forjoining us. michael stull, managing director of manpowergroup. finally, let's return to tech because a uk firm has announced it has developed a quantum chip which can be mass produced, potentially ushering in an era of far more powerful computing. the idea of quantum computing is to use subatomic particles to store and manipulate data, allowing machines to solve far more complex problems than is currently possible. dr chris ballance is ceo of oxford ionics.

he's in california. thanks forjoining us. tell us about what quantum computing is because lots of people might not know what that means. goad not know what that means. good morninu. not know what that means. good morning- the _ not know what that means. good morning. the past _ not know what that means. good morning. the past 70 _ not know what that means. good morning. the past 70 years - not know what that means. good morning. the past 70 years of i morning. the past 70 years of computing has been dominated by small, incrementaland computing has been dominated by small, incremental and steady improvements and you might be forgiven for thinking all the problems we really want to solve we can solve on today at�*simmensely powerful computers but this is not so. there are so many problems. we can write down the problem we want to sell but we cannot come close to solving them on conventional computers. even if we extrapolate the last 70 years of progress for an oven —— another 70 years, there would be lots of problems we could not solve giving the computer time. could not solve giving the computertime. it could not solve giving the computer time. it can make a step change, quantum leap, if you forget the end i forgive the pun and this is exciting.

it will make a big difference if we can solve them with these computers. this if we can solve them with these computers— if we can solve them with these comuters. a , , ., computers. as somebody using a comuter computers. as somebody using a computer how— computers. as somebody using a computer how will _ computers. as somebody using a computer how will my _ computers. as somebody using a j computer how will my experience change? computer how will my experience chan . e? ., , , change? the way we use computers _ change? the way we use computers computers i change? the way we use computers computers is | change? the way we use i computers computers is much change? the way we use - computers computers is much the same way as supercomputers. as an end user you really see the difference but things will get better and certain problems we really want to solve at the moment, people have to solve in a lab, building better batteries for harnessing renewable energy properly. we cannot really do this without sending people into the lives to do tiresome repeat experiments. but we can write on the maths and on quantum computers we can efficiently solve these problems, so we should see the world getting that little bit better. haifa that little bit better. how does it differ _ that little bit better. how does it differ to - that little bit better. how does it differ to ai? i that little bit better. how does it differ to ai? we l that little bit better. how. does it differ to ai? we hear that little bit better. how does it differ to ai? we hear a lot about companies investing in their artificial intelligence. will we see a shift or does this fall under the same category? it shift or does this fall under the same category?- the same category? it falls under the _ the same category? it falls under the same _ the same category? it falls under the same kind i the same category? it falls under the same kind of- the same category? it falls i

under the same kind of category of new computer —— computing, take the problems we want to solve that we have to sell by people doing very hard work by themselves and finding ways to make this more efficient. quantum computing and artificial intelligence are quite separate but have much the same parallels of being able to find ways of solving problems better by throwing computational paradigms at them. in computational paradigms at them. , ., computational paradigms at them. , them. in terms of globally, is there a race _ them. in terms of globally, is there a race to _ them. in terms of globally, is there a race to do _ them. in terms of globally, is there a race to do this - them. in terms of globally, is| there a race to do this better? yes, a massive race. now if you go around the world there are hundreds of companies trying to produce the best quantum computers out there, hundreds of software companies and if you go to all the logical pits around the world they will all have teams working out in the same way as ai how best to apply quantum computing to wear clothes and the potential for massive disruption in a very positive sense because there are so many problems that we currently have to solve by people going into a lab in doing chemistry, for example, job discovery or making better

fertilisers that we can solve more efficiently with quantum computers. more efficiently with quantum computers-— computers. who do you think will win the _ computers. who do you think will win the race? _ computers. who do you think will win the race? you - computers. who do you think will win the race? you have l will win the race? you have done well by achieving mass production of the chips. £311" production of the chips. our focus is trying _ production of the chips. our focus is trying to _ production of the chips. our focus is trying to win - production of the chips. oi" focus is trying to win this race and win it by finding ways of producing these devices and inaudible notjust set inaudible not just set performance inaudible notjust set performance records that are an order of magnitude above the next platform and that is pretty good, but we have done this using chips we can use in the same factories that already build chips for laptops and cellphones and that is what we have been pushing for the last couple of years of our existence and an exciting point to demonstrate this and make it public. to demonstrate this and make it ublic. ., , ., . public. doctor chris ballance of oxford — public. doctor chris ballance of oxford ionics, _ public. doctor chris ballance of oxford ionics, thank i public. doctor chris ballance of oxford ionics, thank you i public. doctor chris ballance l of oxford ionics, thank you for joining us, fascinating stuff and best of luck with your venture. and best of luck with your venture-— and best of luck with your venture._ stay | venture. thank you. stay with us here on — venture. thank you. stay with us here on bbc— venture. thank you. stay with us here on bbc news. -

hello. well, temperatures were round about the seasonal average on wednesday — in the low 20s for most of us, plenty of strong july sunshine. and there's more of that to come over the next few days. in fact, it will be warming up — too hot for some, perhaps, particularly in the south—east of england, but it's a brief, warm spell, with cooler conditions for all by sunday. and always cooler, always wetter in the north and the west — and that's certainly true overnight tonight. there'll be showery outbreaks of rain on this flow from northern ireland, up through western scotland. a few showers, too, for central, eastern areas of scotland, north west england, and down through western wales. clear skies elsewhere, but also some mist patches developing into tomorrow morning. temperatures no lower than 14—16 degrees, so it's a mild start to thursday across the board. now on thursday, we'll still keep these showers across northern ireland and through western scotland. a few showers and cloudy conditions across many eastern areas of scotland, and through northern england, again, it's a cloudier day than on wednesday. we'll see lots of low

cloud, some mist, too, for these irish sea coasts, but plenty of sunshine for much of england and wales, and the temperatures will rise accordingly — 23—27 degrees. we're just starting to feed in this muggy feeling air, and it will feel humid on thursday night into friday — uncomfortable for sleeping. on friday, though, plenty more dry weather on offer. some rain moving into the western isles later — and again, it's rather cloudy and misty towards the western coasts here. but the sunshine just set to continue, and temperatures will rise into the mid—to—high—20s really quite widely, 29 or 30 celsius locally possible in east anglia or in southeast england perhaps. but the warm spell not set to last because we've got cooler—feeling conditions coming behind these weather fronts on saturday. now, we're likely to see some outbreaks of rain, some brightness developing behind for western scotland and northern ireland a little later on through the day. but some heavy, thundery downpours always possible just ahead of the front two, across east anglia and southeast england, and that will

help to lower the temperature. —— too. but you can see that temperatures are dipping as we head through saturday, and by the time we get to sunday, we're all into that fresher—feeling air. so, a drop in temperature from friday through to sunday. on sunday, still the threat of some heavy, possibly thundery downpours at times, also some sunny spells. and another dip in temperature into the start of next week. bye— bye.

good morning. welcome to breakfast with naga munchetty and charlie stayt. 0ur headlines today... joe biden suspends campaigning for the us presidency after testing positive for covid, as pressure grows for him to end his re—election bid. was the uk sufficiently prepared for the pandemic? the uk covid inquiry will release its first report today, looking to answer that question. iamat i am at blenheim palace where sir keir starmer will be meeting almost 50 european leaders as he hopes to reset the relationship with the continent. hundreds of thousands of new homes like this_ hundreds of thousands of new homes like this have been promised by the

labour— like this have been promised by the labour government. we are at a new