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tv   BBC Business Live  BBC News  May 20, 2019 8:30am-9:01am BST

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this is business live from bbc news with maryam moshiri and sally bundock. another blow to the chinese telecoms giant huawei — google cuts it off from vital services. live from london, that's our top story on monday 20th may. huawei will be barred from crucial updates and certain apps as washington piles on the pressure over allegations the firm poses a threat to national security. also in the programme, more turbulence for europe's travel sector. discount airline ryanair, sees a steep dive in profits.
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european markets are open, looking pretty mixed. sweet treats without the guilt — we'll talk to the woman who says being careful with your diet doesn't have to be boring. being careful with your diet doesn't and as google restricts huawei's use of android we want to know, do you own a huawei smartphone? if so are you planning on changing it to another brand? get in touch — just use the hashtag bbcbizlive. hello and welcome to business live. we start with the us technology giant google — the company is cutting off huawei from using some of its mobile services, in what is being seen as the latest blow to the chinese firm. the block would mean huawei loses google‘s security updates and technical support, and any new smartphones would no longer have popular google apps such as youtube and maps.
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the move comes after the trump administration added huawei to a list of companies that american firms cannot trade with unless they have a licence. washington says huawei's equipment could pose a threat to us national security. robin brant is in shanghai for us. this is another development in the ongoing row between the us and 4—way, now we are getting really practical about what this means. yes, this is google, it's huge and it's far away, the second biggest manufacturer of smartphones, it made about 210 million smartphones last year, about half of those stayed here serving the domestic market and the other half went abroad. this move by google will affect everyone
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who owns a handset and it will have a particular impact on users here in china and what this is is a big move bya china and what this is is a big move by a very big company following on from that move that we saw by the american commerce department to try and restrict even further huawei ‘s ability to operate outside china and crucially by targeting the people it depends upon fort supplies. huawei spends about $60 billion on buying in supplies from abroad to make its phones, 11 billion of that comes from the united states. and this is going to be hugely problematic. there is no chance to see how investors in the market will react because huawei is a privately traded company, there no shares for us to look at today. it's 3:30pm, we haven't heard anything official from huawei though i suspect when it comes we will hear talk about this being a further measure as part of a political campaign and its further persecution of a company that
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continues to say it has done nothing wrong, nothing illegal. what it made on the other side is spurred on huawei in time or other big players, possibly samsung, to develop their own operating systems to possibly try and take on google and apple in the future but for now, it's a big blow to the ability of huawei to operate with this handset is handsets going forward. certainly outside china, you tell me what goes on in mainland china but for those outside who have smart devices they use a lot of google stuff whether it's youtube, mail, etc. in mainland china is that the case are not so much because google is restricted a nyway to much because google is restricted anyway to a great degree, isn't it? yes, what you pointed to is the history of google in mainland china, a decade ago it operated in the search business but pulled out because it wasn't willing to abide by the very, very restrictive censorship restrictions that the chinese government puts in place and google hasn't been here in terms of
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search for the last ten years. that is another part of the business, gives you an idea of the context of google operating here in china. gmail, you can't use that, you can't use youtube without a virtual private network which circa the chinese government censorship restrictions but google wants to operate on the chinese mainland, it's had project dragonfly would is talk of a project to get back into search but for the time being that's not going anywhere but in terms of the handset market china is the biggest market in terms of handsets and huawei is the second biggest builder of those smartphones and of google says you can't use the android operating system going forward it's plainly a big problem forward it's plainly a big problem for huawei. robin brant, thank you. there's also a lot more detail on the website, dave lee in san francisco has been blogging on it, lots for you to read about. let's take a look at some of the other stories making the news. japan's economy continued to grow at a steady pace in the first three months
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of this year. stronger exports meant the world's third biggest economy grew at an annualised rate of 2.1%. the government says it will continue to push ahead with it's plan to increase sales tax from 8 to 10% later this year. a brazilian civil defence team have arrived at a town where a dam is expected to collapse in the coming days. they're working with the country's biggest miner vale to try to stop a huge amount of toxic sludge being released. it's not far from the town where a similar collapse injanuary killed more than 250 people, leading to questions about the way vale had been building dams. irish low cost airline ryanair has posted its weakest annual profit in four years and says earnings could fall further next year as it grapples with overcapacity, brexit and delays in delivery of the boeing 737 max. the airline posted annual profits ofjust over $1 billion — a fall of about 29% from the year before.
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this tops off a turbulent time for european airlines and tour operators, with easyjet, thomas cook and tui all showing deepening losses. rya nair‘s chief financial officer says pricing has been a big issue for his airline, and the industry as a whole. pricing remains soft across europe due to overcapacity at this point in time. so our customers enjoyed an average fare of 37 euros which was down 6% on last year. at the same time however they are continuing to spend money on axillary products like reserve seating, priority boarding, car hire and hotels which helped offset that a little bit. costs increased about 5% minus fuel la st costs increased about 5% minus fuel last year and that was up 440 billion. that was the chief financial officer of rya nair talking to us earlier.
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it's a business model which it can get out of. prices and costs going up. when you see a maturing business model, that's why everyone went with ryanair, it wasn't as unique selling point but it was its major selling point, we are cheap and cheerful, a bit nasty, they are trying to get away from the nasty image and stay with cheap and cheerful but for how long can you do that when fuel prices are going up, costs are going up, there is overcapacity? they had 139 million passengers in the past 12 months and they still want to grow by another 8%. they ordered boeing in the fleet to get there. it will be difficult. they are still printing a profit but margins will not continue to go up. is it that airlines like ryanair need to be more realistic about the level of growth they can achieve?” more realistic about the level of growth they can achieve? i think the entire sector has to be more realistic about the level of growth
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they can achieve, we still see a flood of planes going into europe and that's arguably causing a lot of theissues and that's arguably causing a lot of the issues we see today and if airlines don't step back from a six -8% airlines don't step back from a six — 8% trajectory down to 3—4%, more in line with gdp we will continue to see pressures rise. investors always wa nt to see pressures rise. investors always want to know that's what happened in the past but we want to know the future, it's not set much at all, it said we can predict the next six months which doesn't bode well. in the last three or four months we've had two profit warnings from ryanair. you see all the comments on the market from thomas cook, expedia, saying the summer will be very soft. 0n the back of that, ryanair issued guidance for 750-950,000,000 net ryanair issued guidance for 750—950,000,000 net income for the next financial year, down again. how big a worry is it that they are waiting on boeing for these 737 max jets? it was seen to be the newer
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course for ryanair, is that a problem? as long as boeing resolves theissue problem? as long as boeing resolves the issue which i think is the current working assumption, i don't think it will be a large issue, the planes arrived slightly lower so unit cost improvement they were hoping for will not change the overall story for ryanair, they will hope that the max jet will be a huge pa rt hope that the max jet will be a huge part and deliver cost savings. daniel, thank you. sadly, thank you. let's look at the markets. tokyo stocks closed higher on monday as investors took a step away from trade worries and concentrated on hard data. the latest showing that japan's economy unexpectedly grew in the three months to march, shrugging off forecasts for a contraction in the world's third largest economy. indian stocks soared on monday as exit polls predicted a second term prime minister narendra modi — who is seen a business friendly by traders. ryanair ahares down 6%
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after reported weakest annual profit in four years. and michelle fleury has the details of what's ahead on wall street today. on monday twitter holds its annual shareholder meeting. investors won't be gathering at twitter hq or at any physical location, it's a virtual affair with shareholders invited to attend and cast their votes online. among the proposals they're being asked to vote on is one that would compel the board to issue a report to shareholders about how well twitter enforces its own content policies. the rise of bullying and hate speech on social media evidently a major concern for lots of twitter investors. the twitter board is asking them to vote against this proposal. also on monday the head of america's central bank is speaking in atlanta. lots of people will be listening to his speech about how the fed assesses risks to america's financial system. a lot going on stateside. joining us is randeep somel, director of global equities,
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m&g investments. good morning and good to have you with us. this real concern, this dam is looking dicey in brazil, one run by vale, proving to have a very bad track record. these dams have collapsed and what have you, what's the word on this? vale is the national mining champion of brazil and the largest million —— mineral they produce is ion or, the terrain they produce is ion or, the terrain they mining the mineral from is surrounded by mountains and villages, it's biggest competitors among them rio tinto and ate mine from the deserts of they don't have theseissues from the deserts of they don't have these issues but when it comes to this man, you have wastewater which comes from mining, these need to go into dams which tend to be above the ledger so unless they are properly secured, we've seen two disasters in as many years with a mine collapse.
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there was a 50—50 joint venture, bhp deciding they don't want to get into the structures you get into an argument, who's in charge, especially if you are in foreign territory. let's talk about oil prices, we are talking about airlines and higher fuel costs and on cute the price of oil is up 1%, five. the oil price has risen 4096 this year, the main reason is simple, it's controlled by a cartel known as opec and the leader of saudi arabia has come out and said they intend to curtail supply to promote and see prices increase and we started to see that, the members have stuck together, they've seen in the last few years when they get into a prize competition they tend to lose out on this as a resource that's going. how how can prices go? we are at $73 now come 0pec doesn't wa nt we are at $73 now come 0pec doesn't want to do is see prices go so high that it has a negative effect on global growth and therefore demand. the same time so it's finding a
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balance, what they've said is they have made the cuts, the saudi oil minister, he tends to stick through and see the course. 75 medium term seems to be when and where it will stay. expensive at the pump. thank you for now, you're back later to talk all sorts of interesting stories. still to come... we are constantly being urged to watch what we eat, especially if we have food intolerances. we'll meet the woman who says that doesn't mean that we can't indulge ourselves with sweet treats. look at that, i'm hungry. you're with business live from bbc news. the uk hospitality industry is under threat as fewer people
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that's according to a report by caterer.com reveals over 90% of school leavers have written off working in hospitality — that's hotels, bars and restaurants, as most see it as a temporary role that doesn't offer much career progression. welcome to the programme. tell us about this report, we've skimmed the surface, why are young people not using hospitality? i think the report shows there is a bit of a gap between what young people are hearing within school and college and what's actually going on out in the economy. there's not much talk in careers about getting a job and having a good career in hospitality so having a good career in hospitality so this perception with young people is it might be something they do when they're 16 or 17, get a job in a restaurant or a bar but it's probably something that they'll do for a short period of time until they go on another career. 0k. here
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at young people wanting to get into the industry so how is that impacting the industry as a whole? there's a real skills shortage within hospitality and if we think about food nowadays, there is such popularity around eating out, food programmes, even with the recession people have to eat so the food industry is actually one of the biggest industries and the careers available in the food industry are fantastic. notjust available in the food industry are fantastic. not just chefs available in the food industry are fantastic. notjust chefs but re sta u ra nt fantastic. notjust chefs but restaurant managers, marketing teams, accountants, they have all of it within the food industry and it's just getting bigger and as the population gets bigger it will get bigger as well but we've got a real gap in terms of encouraging young people in but also now with a lot of migrants living in the united kingdom, what we are finding is a real shortage and backfilling some of those jobs. tina mckenzie, policy chair of the federation of small businesses in northern ireland, thank you. if you are looking for work, that seems to be the place to look. let's look at some of the
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stories in the businesslike page today that we haven't mentioned, the future british steel not clear, the owner has been talking to the government about a £75 million rescue package. the director of uk steel which represents british steelmakers is talking about new initiatives to try and get government departments and local authorities to bite british steel, details on the business live page. you're watching business live. our top story — google bans chinese telecoms giant huawei from access to key services like updates and certain apps. it comes as washington ramps up pressure on huawei over allegations the firm poses a threat to us national security. tell us what you think about the story and send us in your comments, we will mention them a little later in the show.
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a quick look at how the markets are faring... now, most of us love a sweet treat every now and then, but those of us with food intolerances have in the past found that desire much harder to satisfy. things are changing though, the global market in free—from food, that's dairy, gluten or egg free food, was worth $58 billion in 2018. 0ne company which has taken advantage of that market is livia's kitchen. it's run by 0livia wollenberg, who decided to set up the firm after realising that there was a gap in the market for people with food intolerances who fancy a sweet treat. livia's kitchen began in a kitchen in 2014 and is now a million pound company and we are joined by founder 0livia wollenberg. first of all, you were very young, still at university when you started this business and he literally
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started making free from crumbles in your kitchen, how did you get from doing that to selling those in your first retail which i believe this was selfridge's. it was 11 weeks from idea to launch and i took myself on a business course because i've never had business or food experience so i enrolled myself on a fa st experience so i enrolled myself on a fast track mba they called it and that's where i learned how to run models and look at the fundamentals of business and i at the end of that i was made to do a sales pitch and i won the £12,000 grant, out of everyone on the course. they were mostly doing tech. i have something tangible which i think was the reason why i won because i was giving something to someone that they could taste. you say it was the reason why you won, the judges, did you give them food? absolutely. that's what it was. it's about the food. i'm tempted to say to you both
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dig in. whenever i talk to anyone i say, have a try and when we go to speak to buyers, fun and fundraising i speak to potential investors, all people really need to do is try the food and they are sold. this is the issue, friends of mine who have food intolera nces issue, friends of mine who have food intolerances and they need to eat food that is gluten free, when it comes to things like biscuits or sweet things they make their own because they say what you buy in the supermarket is horrible. absolutely. a lot of people who want to play in this free from space have come into it and had made a more functional and healthy product for us i always came in and said it's all about indulgence, it's all a came in and said it's all about indulgence, it's alla bad came in and said it's all about indulgence, it's all a bad taste and that's how you get people repeat purchasing and we always you are relying on adducts. -- addicts. we are aligning our products against companies like cadbury. your growth has been phenomenal, how much has got to do with the fact you hit the market at the right time, when food
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intolerances, allergies, eating healthily, vegan eating, all of these things started picking up in terms the market? it was very much a right place right time, i was diagnosed with intolerances myself to wheat and dairy and i realised there was a huge gap in the market and there still is. we are still the leaders in producing better for you confectionery, treats that are truly indulgent and decadent. 70% of consumers now are more and more conscious about artificial ingredients and we don't use any of them. we mention the fact you can get this in selfridge's but where else can you get it, it's very high end, isn't it, your product? it's pretty price competitive and you look at the whole market in terms of wellness and health brands but it's more expensive than traditional confectionery because we use premium, good wholesome ingredients like tights and oats. are you in other supermarkets? boots, tesco, sainsbury's, holland and barrett, most of the mainstream supermarkets.
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has your age been a barrier, when you started this you were 25? very successful. five years on, has it been an issue when you've gone for funding or help or investment, a people looked and thought, forget it? it's really interesting. when i go for meetings with potential investors and i'm fundraising at the moment, i go by myself and i'm not daunted by the fact that i am young and i'm a woman and everyone asks me has that been a barrier? i don't think it has. i think actually people think you are very entrepreneurial and they love the story, it is a genuine story and authentic. what advice do you have for any young female or male entrepreneur or would—be entrepreneurs out there who want to start their own business? what is the key thing you take with you?” would say be passionate about the product, it becomes your life, it's all encompassing and if you don't love the product that could be very challenging, because this is my life, this is howl challenging, because this is my life, this is how i have to eat and so it's everything to me and it
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would be impossible if i didn't really believe in what i was selling. really quickly, we are out of town, is it happening? it's it is the right kind of fat, it's good ingredients, we never claim to be healthy, we never talk about health or wellness, it's all about indulgence and trading yourself and celebrating those treat moments. we all love indulgence. it is my middle name. thank you, great to meet you and good luck. thank you so much. in a moment we'll take a look through the business pages but first here's a quick reminder of how to get in touch with us. stay up—to—date with the business news as it happens on the bbc business live page. there is insight and analysis for a team of editors around the globe and we want to hear from you. get involved on the business live web page. 0n from you. get involved on the
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business live web page. on twitter. and you can find us on facebook. business live, on tv and online, what you need to know, when you need to know it. what other business stories has the media been taking an interest in? randeep somel from m&g investments joins us again the top story, google ‘s restriction on huawei. give us your thoughts. when something like this happens we have to step back and say how will it affect us? if you own a huawei phone, google have said today in the latest updates when they start coming through, with we are —— apps like gmailand coming through, with we are —— apps like gmail and youtube are not going to be available and you have to ask yourself how important they are to you. we've asked people to get in touch. isadora from serbia says i
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have a huawei phone and i won't try it, this trade were a stupid and has to stop. if you are from denmark says i'm not going to change for the time being, what if google pulled the plug on other manufacturers, we need an open source operating system vaccinated against political wars. if you're in ghana says i won't change, this move by google in the us will make smartphone companies develop their own operating systems. i love huawei. and if you're from time answers google will lose so many users, i still use huawei. a lot of support for huawei out there. many saying this is a conspiracy, a war between us and china over who will control 52, innovation in tech in the future, it's not about security. to be honest i think it is about security, the chinese government have been known to come back and say we need to look at things in this respect. sol back and say we need to look at things in this respect. so i think when users come to it, they will have to start thinking. good to talk to you, thank you so much. thanks for all your comments today, really
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interesting and thanks for your company. goodbye and thank you for watching. hello. no big changes in the weather story certainly for the first half of this week. today is a case of some dry and sunny spells, feeling warm but we also have some showers which could be heavy and thundery. a bit of a murky start for some, the sunshine starting to put in an appearance on through this afternoon, we will see some showers for northern ireland perhaps. parts of wales, the west midlands and down towards the far south—west of england. a line of showers stretching from north—east scotland and towards hampshire. because of the light wind it will not move the showers on, they could linger, some spots seem torrential downpours with the risk of hail and thunder. many areas avoiding them altogether, feeling present in the sunshine,
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temperatures between the low 20s. this evening, most of the showers will tend to fade away, we have more cloud and outbreaks of patchy rain for parts of northern scotland. here skies for many, we may see the return of mist and fog in some spots, temperatures between six and 11 degrees. through tuesday, high pressure starting to have more of an influence on the weather. there will still be some showers around, not as frequent as today. for parts of northern scotland, we still have cloud, outbreaks of patchy rain on and off throughout much of the day. elsewhere, some fine and dry weather around, lengthy spells of sunshine, still the risk of one or two heavy showers, many spots remaining dry and temperatures varying a little better than today, highs between 15 and 22 degrees. as we head into wednesday, the area of high pressure slipping down towards the south, in
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between two low pressure systems. it looks as though the rain for parts of scotla nd looks as though the rain for parts of scotland will become more persistent as the day goes on. we will hang on more cloud. a lot of sunshine elsewhere, most places remaining dry but we could see increasing amounts of card bubbling up increasing amounts of card bubbling up as we head through the afternoon. still feeling pleasant in the sunshine, i temperatures of 21 celsius, down towards the far south and east. as we head through the second half of the week it looks as though low pressure will have more ofan though low pressure will have more of an influence on the weather, turning more unsettled, but still some dry weather to be had. goodbye for now.
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you're watching bbc news at 9:00am. the headlines: google blocks huawei from using some of its mobile services, in a major blow to the chinese telecoms firm. too many children are being admitted to mental health hospitals unnecessarily, according to the children's commissioner. president trump warns iran it will be destroyed if a conflict breaks out between the two countries. all this week bbc news is in middlesbrough — once called the worst place for a teenage girl to grow up. we meet the young women turning things around. i never thought that i'd be able to become a doctor but ruby's has helped me to believe that i can do it if i put my mind to it and keep it going in school. royal child's play — exploring the chelsea garden designed by their mother, the duchess of cambridge.

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