this is business live from bbc news with maryam moshiri and victoria fritz. cashing in on the cloud. microsoft's profits jump, showing once again why it's the world's most valuable public company. live from london, that's our top story on friday the 19th ofjuly. with new pc sales surging too, it's been another bumper period for microsoft, so what will it take for it's rivals to catch up? also in the programme: the $5 billion bill — planemaker boeing put‘s more details on how much the grounding of the 737 max will cost it after those

two fatal accidents. european markets are open and they have opened up in positive territory. it's been another big week of global trade tensions and brexit worries, so we'll talk through it all with newsnight‘s economics editor, ben chu. quietly, ever so effectively, microsoft is winning the corporate cloud game. but in an age where brands like apple and google dominate, we want to know — do you still use microsoft at home as well as work? get in touch with us using the hashtag #bbcbizlive. hello and welcome to business live. we start with the only one tech giant that is valued at more than a trillion dollars. it's not amazon or apple, but microsoft. and it has just proved again why it is the world's most valuable publicly traded company. injust three months, this giant brought in almost

$34 billion in revenue. about the same amount as the value of cyprus‘s entire economy. and unlike a number of the tech giants, this company is actually making money. in fact, $13 billion of profits. how? office software and cloud computing are proving to be the big money—spinners for microsoft. the likes of microsoft 365 and the azure business in particular. what's powering all of this? an unexpected rise in the number of new desktops and notebooks being sold around the world. they're up by almost 5%. why? companies are trying to replace old machines still running on windows 7 before support for the software expires next year. there's also the fear that this could be a much more costly investment in the future if trade tariffs rise. all of this has helped the company cement its place at the top of the wall street tree. you can how this year it's overtaken

rivals to be the only us company worth more than a trillion dollars. with us now is william de gale, portfolio manager, at bluebox wealth management. you invest a significant amount of money and global tech and you have your biggest position in microsoft. why is that? it is one of the few really large technology companies that i can see will be an even better company in five years than it is now. the really largest tech companies are the winners of the last few years and they have got that by being incredibly successful and having amazing business models and having amazing business models andi and having amazing business models and i can see them being even better businesses in five years. how will they do that because expectations for this company are huge, but at some point all of these markets have got to mature, including cloud competing for businesses.” got to mature, including cloud competing for businesses. i think cloud penetration in the business market is still pretty low, high

teens or maybe something of that sort. not all business competing will move to the cloud. a lot of it will move to the cloud. a lot of it will remain on premise for the foreseeable future, but even so there is huge growth potential here for public cloud and hybrid mix of public and private and microsoft is one of the two clear leaders in this business, so there is certainly a lot of scope for growth and more importantly the return on the investment they have already made is potentially very high, so they started by building a lot of very big data centres around the world. they are now filling them out with equipment, so the requirement for additional growth is lower and the business is becoming less capital intensive than it was a couple of yea rs intensive than it was a couple of years ago and the result is the bottom line is doing extremely well, so bottom line is doing extremely well, so the top line is low teens, low double digits, but the bottom line growth is a much bigger number and free cash flow is very good. capital

expenditure, that is. let's talk about investment because they have had quite a different strategy to their major competitor, amazon, in terms of data centres, where they put them and how they are managing them across the world. when is that going to structurally birth rate for them? i think it is bearing fruit. as far as them? i think it is bearing fruit. as farasi them? i think it is bearing fruit. as far as i can see, microsoft in the public cloud, the amazon business has greater revenue, but it seems to me that microsoft business is catching up in terms of its usefulness to businesses. they started off with a policy of distributing their data centres much more widely and giving more flexible teacher users. that is an expensive way to start, but then you have the benefit that you can keep data much closer to the cloud. maybe there are regular terry constraints and weather data can be so there is much greater flexibility and have got to the point where they can benefit from that. 0k, and queue for coming in. really interesting to hear your thoughts. let's take a look

at some of the other stories making the news. anheuser—busch inbev, the world's largest brewer, says its selling its australian operations to japan's asahi for around $11.3 billion. the deal is expected to help the belgium—based brewer reduced it's $100 billion debt, which it took on when it bought sab—miller in 2016. the german chemicals giant bayer has welcome a decision by a us judge to call for a retrial in one of the lawsuits about its roundup weedkiller. alva and alberta pilliod had previously been awarded damages of $2 billion after a jury found the product caused them to get cancer. the company say the retrial decision is a step in the right direction and insists roundup is safe to use and doesn't cause cancer. german auto—maker bmw and chinese online gaming giant tencent holdings are teaming up to launch a computing center in china that will help develop self—driving cars. the computing center, which will start operations by the end of the year, will provide cars with data—crunching capabilities to help them drive semi—autonomously and, eventually, autonomously.

the planemaker boeing has put more cash aside for the growing bill for it's 737 max crisis. it says it will spend $4.9bn compensating airlines over the grounding of the airliner. it's been banned from flying since march because of those two crashes will killed 346 people in ethiopia and indonesia. our business correspondent theo leggettjoins us. this is quite a big amount of cash that it this is quite a big amount of cash thatitis this is quite a big amount of cash that it is having to put aside. it isa that it is having to put aside. it is a decent chunk of cash, $5 billion in anybody‘s money is a lot, but it is likely to be just the start. this is cash that boeing is setting aside to compensate airlines. you have airlines that

already have the 737 max and had it in service and those airlines are currently sitting on the ground and not earning their keep and in the meantime the airlines are having to play financing cost on them and maintain them and so on and so they are making a loss. other airlines have been extending a lot of new aircraft, to service and they haven't had that so they have had to either cancel flights or lease aircraft in or keep older models working for longer, older models are less fuel—efficient and they cost more to run so they are racking up losses as well and these losses are quite substantial so ultimately boeing is likely to have to pay compensation for that and that is what this £5 billion is about. but that figure relies on boeing starting the process of getting the 737 max rear by regulators in the autumn, the fourth quarter of this year. that may not happen. and of course it does not cover the potential cost of a wealth of lawsuits brought by relatives of the victims of those two tragic accidents. thank you very much. national australia bank

is getting a new boss. ross mcewan is currently in charge of royal bank of scotland where he's has been seen as the man who turned things around after the global financial crisis. that led rbs to be bailed out by the uk government which still owns 62% of the lender. he's also got a big challenge in his new role. sarah toms is in our asia business hub. as you said, it is a big challenge and the question is whether he can turn around the business. we have ross mcewan coming in after the rather abrupt departure of the ceo and the chairman earlier this year. they left in the fallout of a misconduct enquiry into the financial sector. this royal commission enquiry criticised the whole industry across—the—board for

things like fee overcharging and aggressive sales tactics, but nba had a particularly hard time over accusations that the bank failed to accept responsibility for any wrongdoing. so now neb which is australia's fourth largest bank is fighting to win back the trust of customers and that is something ross mcewan will have to do along with help to restore the bank's reputation and credibility. but he will be a fresh face and he has already experienced challenges leading rbs through restructuring during tough market conditions and thatis during tough market conditions and that is something that the bank will wa nt to that is something that the bank will want to do as there is a lot of pressure increasing in australia to bring up simple banking systems and slash costs. absolutely. thank you very much indeed. asian stocks rose on friday after a top federal reserve official cemented expectations of a us interest rate cut later this month,

fuelling appetite for riskier assets. in oil markets, crude surged after the united states said its navy destroyed an iranian drone in the strait of hormuz, a major choke point for global crude flows, raising concerns about supply disruptions out of the region. europe is higher. a strong oil sector and firming expectations of more monetary easing from the world's bigcentral banks drove european shares half a % higher onfriday, ending a volatile week marked by a series of luke—warmcorporate earnings. michelle has the details of what's ahead on wall street today. investors want to know how the all sector is faring, due to cutbacks. also stronger customer spending is likely to left profits at american express but has the credit card company be able to lead on how much it spends on its rewards programme? on the economic strength, the university of michigan is expected

to say its consumer sentiment index rose injuly. joining us is fiona cincotta, market analyst at city index. the federal reserve and expectations for a rate cut... lower inflation does mean that lower rates look like they were becoming sometime soon, don't they? yes, this has been a huge focus by the market now for a couple of weeks. ever since it was hinted that there could be a rate cut on the way. last night, the market up till now had been sort of pricing in 25 basis point cut, so 0.2% when the federal reserve meet at the end of this were month. last night, we had williams come out and suggest that the fed should actually act quickly and take sort of sharp action and the markets have interpreted this as actually may be the fed is considering a 50 basis point cut, so a much deeper cut than they were pricing in originally.

that has caused the dollar to drop and then obviously stocks have risen on the back of that with a more co mforta ble on the back of that with a more comfortable business environment. let's talk about oil. a favourite topic of hours here. the main reason why it is my favourite is because it is just so volatile right now. we have seen the rise today and busy there are geopolitical tensions on there are geopolitical tensions on the strait of hormuz. absolutely. there are some key factors that play. oil has been trending lower across the week, quite sharply as well. us crude is down 7% across the week. as we have seen, global growth is really slowing. china plasma growth is down at three decade lows, but then last night this morning we have had problems the middle east which is supporting the price and putting it higher again so lots of factors in play there that is keeping it supported. and also we have had the global outlook, the outlook for oil has also been reduced, so that has well is keeping any rise in check. that's right. we

are going to talk to you about some of the paper studies in about 15 minutes, so speak to them. thank you very much. still to come, brexit uncertainty. you're with business live from bbc news. two million public sector workers are reportedly set to get a £2bn pay rise. what? not each. in total. the treasury will unveil the biggest public sector pay rise in six years on monday as one of theresa may's final acts as prime ben thompson has been looking at the details this set to be announced on monday. we expect it to be a pay rise worth about £2 billion for many public

sector workers. it would be the biggest public sector pariahs in six yea rs biggest public sector pariahs in six years and expected to be the last major move of theresa may as prime minister. so what do we know? well, teachers will get a rise of about 2.796, teachers will get a rise of about 2.7%, soldiers in line for a bit more, 2.9%. police officers will get about 2.5% extra. crucially, it won't apply to people like nurses or junior civil servants. they are not in line foran junior civil servants. they are not in line for an increase. nonetheless, this rises above inflation. inflation currently running at about 2%, so significantly higher than that. but not as high as that seen in the private sector. a deal there on average are running at about 3.5% higher, so still below the levels that we are seeing in the private sector. big questions about where the money will come from to pay for this. there is not a huge amount of spare money in the system and so many expecting there will be savings elsewhere to fund these increases

for public sector staff. and remember those public sector staff have been subject to a pay freeze for many years as part of the austerity cuts brought in by the coalition government, is a big questions about how this will be funded. and remember still below the deals announced in the private sector to, so still a significant gap there. nonetheless, public welcome news when it is officially announced on monday that 2 million public sector staff are set to get a pay rise, a pay rise worth £2 billion. not each... the bbc and itv have announced details of a new subscription service which is called britbox and it will cost about £5 per month. it will be due to launch in the last three months of the year. plenty more than that.

you're watching business live — our top story. microsoft shares have risen again in after hours trading after more strong results. the world's only trillion dollar public company is doing well in cloud computing. a quick look at how the markets are faring. the european markets that have a percent due to good news. it has been a pretty busy week. it's been another busy week of business and economics news with global trade tensions and brexit worries all taking their toll. ben chu is economics editor for the bbc‘s newsnight programme and is here to talk us through it all. let's start with a trade war. how is

it all going to end? for china, it is biting now with the lowest growth rate i think since records began, so since the early 90s. 62% in the second quarter. we had some horrendous trade data from singapore, from south korea, from japan. so really right across asia, donald trump osman trade war is hitting and he is claiming credit for it in a very unhelpful tweet. he said china's growth rate has slumped. this is because my trade what is biting and this is why they will be forced back to the table and it is all working brilliantly to plan. leaving people believe him? it is certainly true that it is having an impact on the global economy. this is not just an impact on the global economy. this is notjust him saying it. a lot of analysts say that it is feeding through and they are talking about a global recession, which does not mean necessarily contraction but growth rate below 2%. he is clean credit and on this when he might be right. let's talk about things closer to home. brexit has been dominating the news yet again and one of the interesting things we talk about often on this programme

is the pound and how it is very much a barometer of how investors see the goings—on in westminster and the pound had a bit of an up—and—down week. yes, it was down on the talk of the backstop being dead from the two leadership candidates, boris johnson and jeremy hunt. they said the pound was down to 1.24, which is the pound was down to 1.24, which is the lowest in two years. and that you had as many rebellion against the prorogation of parliament and a little spike up in the pound so absolutely it is a barometer and the choices that traders are really worried about the prospects of the uk crashing out with no deal and also this is going to keep doing that. analysts are saying, how low could it go? no—deal brexit, some are saying parity with euro, 1.1 with the dollar, so you haven't seen anything yet. he said that for their own effectively the suspension of parliament, that is what you meant by that, that coming out in the same day as was office for budget responsibility forecasts for the uk as well enable deal brexit scenario, which at the moment is the default. it is. this was not their own forecast. they basically plugged in

an imf forecast from earlier this year. there was a bit of confusion about that. it does have a pretty bad impact on the public finances. the next 30 billion of borrowing per yearin the next 30 billion of borrowing per year in the short—term. the imf think that they plugged in that was not by any means the worst scenario for no deal out there. they have actually picked quite a moderate one, is actually a could be a lot worse. you don't plugging in. that gives us a segue to electric cars. the number of elected models said to triple by 2021. is this good news? i think it is. it sounds like good news. everyone is there will be a big shift to electric. they suggest that the car—makers are rightly getting there and there will be a lot more electric models for people to choose from. because there is a caveat there. we know that electric ca i’s caveat there. we know that electric ca rs have caveat there. we know that electric cars have a limited range. there are limited places to charge them. it is all very well the car—makers actually producing all of these ranges, which is definitely good, but we need the info structure as well. we need governments and local councils to act to make impossible for us to have this electric feature. lots of the companies would

say you know what has been really unhelpful? the government reducing the subsidies are in fact in some cases scrapping them altogether for electric vehicles. yes, totalfalse economy. we know that the car companies are in a massive storm for various reasons, those trade words, the diesel gate, the shift to electric. they really need governments to act get behind them rather than being a headwind to their transition. it is going to be fascinating to watch. and he very much, ben. thank you. it's friday so time for the latest in our million dollar ideas series. every country has a version of this sweet treat but as aaron heslehurst explains only the united states could take the simple dish and start selling it in its billions through giant corporations. hey, it's down at! as american as

coke and burgers. and of coursejust as good for you. it comes from a dish brought over by settlers called sweet bread, deep—fried denial. but the first things called doughnuts where these things, made in the 18405 where these things, made in the 1840s by the mother of a sea captain. there he is, captain gregory. his mother made them for his sea voyages and sheep entitlements and once inside the dow, hence the name. in the 1920s, this man right here, a russian immigrant, invented this, the world's first doughnut frying machine so he could knock them out quickly for all of those theatre—goers. but these ones had a hole in them, perhaps to save on the nuts. adolf made $25 million from selling his machine to all across america. giant franchises popped up everywhere. dunkin‘ doughnuts,

krispy kreme. now americans by 10 billion doughnuts every year. that isa billion doughnuts every year. that is a lot of dough. i love the ones that are covered in sugar and have jam inside. the classic. our you can get them anywhere but greg severally delicious ones. i used to have four of five of them a day when i was a student. i'm not kidding. it is discussing. as well as five cans of coke. anyway! moving swiftly on from my sugar addiction. we have been asking you to get in touch with us on social media about microsoft. danny saying he has apple at home and microsoft, annoyingly, at work as they do not give us apple computers and also need specific software. that is interesting. andrei says that microsoft software

is better and much less expensive than apple. someone else says apple isa than apple. someone else says apple is a rip—off. google is fine for searching and for a smartphone. someone says microsoft is still cool someone says microsoft is still cool. i use it everywhere. and someone cool. i use it everywhere. and someone else cool. i use it everywhere. and someone else says cool. i use it everywhere. and someone else says i have started embracing microsoft more for business at their products are more open and their licensing guys no longer harass you and the pricing model has become more reasonable. perhaps one day they will use it for personal use as well. a bit of a trend coming along there. fiona cincotta from city indexjoins us again. do think it is still cool?|j do think it is still cool? i think it might be getting there. i like it. kind of like doughnuts. let's talk about this story in the financial times today. a space industry. of course, tomorrow is the anniversary of the moon landing, 50

yea rs anniversary of the moon landing, 50 years ago. this is this article here about the private space industry going to the men. all sorts of things. you can propel human remains up things. you can propel human remains up there apparently for a permanent resting place beyond the earth. digital libraries, all sorts of things. what you make of this? digital libraries, all sorts of things. what you make of thi57m digital libraries, all sorts of things. what you make of this? it is massively back in focus and also president trump is wanting to put someone president trump is wanting to put someone back on them in. i think he wa nts to someone back on them in. i think he wants to say 2024 which is four yea rs wants to say 2024 which is four years earlier than planned. he wants to be involved in this and have his name around it. nasa is turning to the private sector to get more funding, basically, to help them with this. and there are some really interesting examples of what they are looking to do. forex apple, the idea that there is frozen water on them and saw how they are going to get there, so this budget is needing to be pretty expensive in order to get through all these. 0k, lovely to talk to you. the 50th anniversary of the first learner landing. back here

on earth, it is friday and that is your rio grande. that's it from business live today. there will be more business news throughout the day on the bbc live webpage and on world business report.(pres r)we'll see you again tomorrow. hello. good morning. a wet start to the day for many others. heavy rain across england and wales at the moment. we can see it here on the pressure chart. this weather system moving north and eastward. a lot of that pitching in to scotland during this afternoon. many of us today, there will be some heavy rain at times. it will be quite breezy and the chance of thunderstorms later on as well. this is how it looks. the rain spreads into central and southern scotland during the afternoon. by the far north of scotland, something a little bit drier here. some showers and sunny spells. the rain sets in and a pretty wet afternoon to come. the rain will be replaced by showers which will turn heavy. maximum temperature is 18—21dc. showers will

emerge into heavier and longer spells of rain tonight in eastern and central areas. goodness by the gardens. noticeable rain moving its way through. overnight impetus 16-i7dc in the way through. overnight impetus 16—17dc in the south—east. a warm night to come into the start of the weekend. that wet weather today is all associated with this area of low pressure. it is going to generally made its way eastward, but we have this occluded front which is going to drag its heels on saturday and thatis to drag its heels on saturday and that is going to bring showers to scotland, northern england and wales. the showers could be heavy. maybe even the odd rumble of thunder, a thunderstorm extended that. they will move eastwards, is a further west it will come a little bit drier and brighter into saturday afternoon and maximum temperatures when 1—24dc. that occluded frontal move eastwards. it will clear and then there will be a ridge of high pressure developing as we go into sunday before this weather system spreads in from the west. that will

bring some heavy rain to northern ireland into western scotland. the wind picking up throughout sunday. elsewhere, a bright start, but the cloud increases. it should be dry for most of englund and wales, perhaps a better day of the weekend of the two days. 21—24dc. internet speak, there is temperatures going even higher. we started tapping to some of the hot weather across spain and france. southerly winds bringing temperatures widely into the 20s, perhaps even into the low to mid 30s for the london area into next week. you can see 24—28dc with some sunny spells. some uncertainty as to how all of that heat will last. maybe it will end by midweek. goodbye.

you're watching bbc news at nine with me annita mcveigh — the headlines. millions of public sector workers — including police officers, soldiers and teachers — are in line for their biggest pay rise in six years. 17 people have been injured, some seriously, in a car cruise crash in stevenage. welcome to britbox. britbox — the new streaming service from the bbc and itv — is set to launch in the uk at the end of the year. england's schools desperately need a multi—billion pound cash injection — according to a group of mps. the moon landings 50 years on — we ask you to relive your memories of man's greatest endeavour.