this is the business briefing. i'm sally bundock. reforming retirement — brazilian lawmakers are set to vote through a dramatic rise in the pension age, and workers are not happy. grilled on the hill — investors look for interest rate clues as fed chairmanjerome powell faces lawmakers' questions. and on financial markets in asia it's a mixed session yet again, as investors brace themselves for what the us central bank chief will say.

it isa it is a critical day for rozelle. —— brazil. brazil's lower house of parliament will vote today on a long—awaited overhaul of the country's generous pensions system, which analysts say is critical to improving brazil's public finances. this will be the first major test for the government of far—right president, jair bolsonaro, who has made the issue one of the central platforms of his government. the pension reform bill is the central plank of president jair bolsonaro's economic policy. it aims to generate savings of around 940 billion reais or $2“; billion over the next decade. the plan includes raising the minimum retirement age, to 65 for men and 62 for women. retiring at 55 is currently the norm, with many brazilians earning 70% of theirfinal salary for the rest of their lives. pension reform is key to bringing down brazil's ballooning debt, which touched a record 79% of gdp —

or total economic output — in april. pension payments account for about a third of all government spending. the overhaul is also aimed at reviving the brazilian economy, which is still struggling to shake off the 2015—2016 recession. that saw the economy contract by almost 7%. but the pensions reforms are fiercely opposed by workers. that was the situation at least when first proposed. pablo riveroll, head of latin american equities at schroders, good morning. it seems the mood is changing? i think it is. there has been a gradual realisation that tension benefits are unsustainable and the more this goes on the more

the pension benefits will eat part of the budget on other key areas, social welfare, education, healthcare et social welfare, education, healthca re et cetera social welfare, education, healthcare et cetera so there has been a shift under the perception of the reform and this government has done quite well in that it has allowed the population to hear that message. to what extent will it boost the economy? i think it is a major long—term policy for brazil. if we look at it with and without a pension reform, in five and ten yea rs pension reform, in five and ten years it would look very different. without a pension reform we would go beyond 100% by 2024 of gdp and numbers get worse. with the reform, we could stabilise the deficit at 7796 we could stabilise the deficit at 77% and hopefully, once we get more growth, it starts dropping again. as

investors, it is completely different. this is howjair bolsonaro was elected, that he would boost the economy. not least because of that massive drop—off in the price of oil a few years ago. jair bolsonaro's was about reducing corruption and crime, his campaign. it was also a rejection of previous administrations that had impose a lot of pain. the government cannot fund the growth so he needs the private sector and for that you need confidence and generate the right incentives. how is the economy doing now? poorly. it has been another disappointing year. we started the year hoping the economy would grow 2.596 year hoping the economy would grow 2.5% or more, latest estimates are

below i%. 2.5% or more, latest estimates are below 196. we will have to leave it there but thank you for coming in. we will keep track on how that progress is in brazil. the chairman of the federal reserve is set to start two days of testimony in front of us lawmakers. investors will be scrutinising his comments for signals of when, and by how much, interest rates will be cut in the coming months. as the bbc‘s michelle fleury reports from new york, the central bank has faced repeated attacks from president donald trump. federal reserve chairman jerome powell begin talk about policy in his testimony but he may not be able to steer clear of politics. wall street will be listening closely to see if he offers any clarity on interest rates. he and his committee meet at the end of this month and thatis meet at the end of this month and that is when they decide to cut interest rates or leave them as they. after a strong june jobs

report, prospects are dimming by the day. breakout are used typically to simulate a faltering economy. an important message may have little to do with monetary issues but to keep the federal reserve as an independent body in the face of threats and complaints from the white house. donald trump asserted the dowjones white house. donald trump asserted the dow jones industrial average would be up to 10,000 points higher if the feds cut rates. larry cutler, the economic advisor, said jerome powell's job was safe at the moment. now let's brief you on some other business stories: the mexican peso plunged by the most since a tariff standoff with the us in late may after the country's finance minister abruptly resigned. carlos urzua announced his departure on twitter, citing conflicts of interest and policy disagreements within the government. levi strauss has reported a i7% drop

in quarterly profit. the iconicjeans maker was hit by a stronger dollar, higher marketing spending, and costs related to its recent stock market listing. its shares slumped in extended trading on the news. italy's huge debts are for many the biggest financial threat europe is facing right now and could lead to an even bigger crisis than greece. it's all because of government debts that the governor of the central bank has told the bbc too high and need to be reduced. a significant amount of this is held by banks across europe so any default could have consequences well beyond italy. from rome, darshini david reports. italians are having to tighten their belts, and their lack of cash could affect us all.

translation: many people havejust 700 or 800 euros a month to live on. people are losing their jobs all the time. however tempting their products, it is no easier for businesses. translation: we get nothing back. we pay taxes but then we expect the service is to be good. instead they are cutting them all. here at the bank of italy they are concerned about how tough life is for italians. as in the uk, wages have failed to keep pace with the cost of living over the past decade. so, a government that is promising to slash taxes and raise public spending has an obvious appeal. but that has pushed up the level of public debt to a point that is concerning them notjust in brussels but also here in the central bank. it is high. it has been increasing because of low growth. but at the same time there is no uncertainty on how to deal with it. but at the same time there is uncertainty on how to deal with it. and the markets are

making us pay for that. the problem is that over 2 trillion euros of italian public debt is held by banks, notjust here but across europe. if there is a crisis of confidence among investors about the government's ability to manage its money, they could all suffer, and so, too, could their ability to lend, just as many parts of the european economy are struggling. it's not just italy. germany is at risk of recession, while the uk is struggling with uncertainty. so, any financial shock here could be more damaging than the greek crisis of 2010. italy is a major economy in the eurozone. greece is relatively tiny, compared to italy, to italy's economy, to italy's debt market. so the destruction that might cause is much bigger. we are in a moment in which the

european design certainly is not at its height so the right tensions, very strong tensions, and each country has its own tensions. after decades of lax financial management, the government has promised brussels it will tighten up its finances. these italians' hopes for greater prosperity risk being sacrificed for the fortunes of europe as a whole. darshini david. that's it for the business briefing this hour but before we go, here are the markets: you can see a mixed picture emerging with investors trading what i had of the testimony byjerome powell.

the uk's preparations for climate change are being run like dad's army with a ramshackle approach to the crisis, according to a scathing new report. the government's chief climate advisors say they are shocked ministers are failing to cut emissions fast enough, and adapt to rising temepratures. our environment correspondent roger harrabin reports. let's just start by looking up... climate want it meant more heat waves and that would leave the elderly vulnerable. care homes like this will need to be adapted to stay cool this will need to be adapted to stay cool, along with hospitals and homes. some exercise classes are already accompanied by careful rehydration. we ensure staff are extra vigilance and have an

awareness of how important it is to support our residents in being hydrated and we do that by offering cold and odd options often. care homes are a problem because of the uk's increasing elderly population but many hospitals are overheating as well and even modern buildings are built with ventilation that are inadequate for the sort of temperatures we are expecting. the fa ct temperatures we are expecting. the fact large areas of the uk. some areas vulnerable to sea level rise. ministers need to medicate much better about what is expected with extreme weather strikes, according to the report. the transport department comes in for sharp criticism. its emissions have barely dropped. the government insists it is taking climate change very seriously. the committee wants

deeds, not words. roger harrabin, bbc news coming up at 6 o'clock on breakfast charlie stayt and louise minchin will have all the day's news, business and sport. this is the briefing from bbc news. the latest headlines: the two contenders to be the next british prime minister have clashed in a head—to—head debate. boris johnson and jeremy hunt argued about brexit, the economy, the qualities needed to be the country's leader and whether britain should leave the eu as scheduled on the 31st of october. what we should be doing is getting ready and encouraging the people of this country to believe they can do it because they can do it. being prime minister is about telling people what they need to hear not just what they want to hear. america's top general says the united states is seeking to set up an international military coalition to safeguard strategic waters off iran and yemen. generaljoseph dunford said the us hoped to find friendly countries with the political will to create a task force within the next two weeks.

now it's time to look at the stories that are making the headlines in the media across the world. we begin with the financial times and the ongoing diplomatic row between the us and the uk after donald trump lambasted theresa may and britain's ambassador to the us, kim darroch, via twitter. this was a big part of the debate last night on the television. the times leads with the same story, but with the focus on the reaction of the two tory rivals, boris johnson and jeremy hunt, to those comments by president trump. staying with uk politics and the guardian reports that mps have voted astoundingly to extend same—sex marriage and access to abortion to northern ireland, bringing it in line with the rest of the uk. the metro asks, would you want alexa to do thejob of the gp?

as amazon and the nhs form a partnership aimed at easing pressure on doctors and hospitals. the bbc website reports on the ethnicity pay gap, and the fact that chinese and indian ethnic group workers are the biggest earners in the uk. finally the independent has this picture of a rather forlorn johanna konta taken just before a row with a reporter whom she deemed patronising during a press conference. with me is cornelia meyer, ceo of mrl corporation business consultancy. let's dig deep and have a look at the stories in detail. we start bed the stories in detail. we start bed the financial times front page, the headline is that hunt hits back, what do you make of this diplomatic i’ow what do you make of this diplomatic row that is emerging between the us and the uk? it is incredibly u nfortu nate. and the uk? it is incredibly unfortunate. i would say,