another trump bump? markets hit record highs after the us president says he would demand an immediate drop in the interest rate. japan raises its main interest rate as the world's number four economy puts stagflation in the rear view mirror. and we'll be live in davos with the boss of the world economic forum, looking back on a big week for global leaders. welcome to business today, i'm tadhg enright. we start with markets, which opened up in the uk, france and germany after record high closes in europe and the us's s&p 500 on thursday.

this all on the back of president trump's wide ranging virtual speech to the world economic forum in davos. he covered a lot of ground — promising to cut the us corporate tax rate to 15% for those companies that make in america. he urged the oil—producing cartel opec to �*bring down the cost of oil'. and said he'd �*demand that interest rates drop immediately�* if those prices fall. something the independent us central bank — the federal reserve — may raise an eyebrow at. let's have a quick listen. ask saudi arabia and opec to bring down the cost of oil. you've got to bring it down, which, frankly, i'm surprised they didn't do before the election. that didn't show a lot of love by them not doing it. i was a little surprised by that. with oil prices going down, i will demand that interest rates drop instantly, and likewise they should be dropping all over the world, interest rates should follow

us. ., ., h, us. you heard it there, some miaht us. you heard it there, some might call— us. you heard it there, some might call it _ us. you heard it there, some might call it wide-ranging i us. you heard it there, some l might call it wide-ranging and might call it wide—ranging and some might call it rambling. susannah streeter is head of money and markets at hargreaves la nsdown. everything he had to say about tariffs have been concerning to those people at davos who care about open trade, but more broadly, investors seem to like what they are hearing, that is what they are hearing, that is what we are seeing in the markets. i what we are seeing in the markete— what we are seeing in the markets. ~ ., , ., , markets. i think what investors are taking _ markets. i think what investors are taking on — markets. i think what investors are taking on board _ markets. i think what investors are taking on board is - markets. i think what investors are taking on board is that - are taking on board is that there is potentially room for negotiation when it comes to the tariffs. so of course president trump has said he wants to slap really high tariffs on mexico, and canada, but also on china and the european union. however, he has just said in the last hour that he doesn't really want to see tariffs on china and they could be some kind of other opportunities, so really it is

being taken as a tactical negotiation, so the hope is that some of the worst fears won't materialise. interesting what he has to say on inflation, it is notjust oil prices and the cost of fuel that leads to inflation but the federal reserve, the us central bank has to take in mind it is alsoa labour bank has to take in mind it is also a labour market cost as well. the cost of the consumer goods, and the worry has been that if tariffs are imposed that if tariffs are imposed that would put up the price of consumer goods and his immigration policies could mean that labour costs would go up. so there are still lots of questions which are very unanswered, but as far as tariffs are concerned, i think we are seeing rises in markets because they are seeing perhaps it is a negotiation ploy by president trump. figs it is a negotiation ploy by president trump.- it is a negotiation ploy by president trump. as you say, that point _ president trump. as you say, that point underlined - president trump. as you say, that point underlined by - president trump. as you say, that point underlined by an i that point underlined by an interview he gave the fox news where he said he doesn't actually want to levy tariffs on china, something which contradicts what he said on the campaign trail. what is your reading of what he has had to say about demanding an interest

rate cut? is that putting the independence of the us federal reserve into question? or perhaps positioning himself to take credit for the interest rate cuts that we expect to happen this year anyway? yes, there have _ happen this year anyway? yes, there have been _ happen this year anyway? 1&1: there have been expectations dialled back in terms of the number of interest rate cuts that the federal reserve will actually bring in because of the buoyancy in the economy. and i think what we are seeing with rises in the stock market and wealth perception is that that might make inflation pressures a bit worse potentially. yes, he is trying to put pressure on the federal reserve and everywhere when it comes to world leaders, central banks, and i think we have seen it before. i don't think it is really going to sway opinion at the fed. i think they are likely to continue the course of action already discussed in the upcoming meetings there will be looking at the data rather than what president trump has to say.-

rather than what president trump has to say. indeed. thank ou ve trump has to say. indeed. thank you very much- _ staying in davos, where the uk trade secretary has been speaking to the bbc. he left the door open to a potential deal which could see the uk following eu rules forfood and farm products to regain frictionless access to european markets. jonathan reynolds' comments came after eu trade chief maros sefcovic told the bbc on thursday that a new uk eu agreement is possible. that was an incredible positive and helpful contribution, i had and helpful contribution, i had a conversation with him a bilateral meeting and i thanked him for that. the individual components of that which me and sefcovic went through, which sectors of the uk would benefit from that, careful analysis is what that means. i think that improves, and we have always said that we can improve in

terms of trade with the eu in a way which doesn't revisit customs unions or single markets or the arguments of brexit, and we cannot do that while pursuing closer trade links around the world. i think the twin track strategy is the best. but i think we have seen a positive response in davos. the interest rate injapan — the world's fourth largest economy — has been increased to 0.5%, the highest level since 2008. japan has been an economic outlierfor a generation now. unlike other major economies, it's been battling deflation, and that's kept the cost of borrowing there extremely low. that situation turned around last year when the bank ofjapan raised its interest rate from zero to 0.25%, here's mariko oi with more. this chart shows the history of the cost of borrowing injapan. for the past 25 years, it has

been pretty flat. it was in 1999 when the bank ofjapan became the first central bank in the world to cut interest rates to zero. it was a bold move at the time. the country was experiencing falling prices, also known as deflation. and lower rates were meant to encourage spending and investment, at least in theory. but consumers were not buying it. that is because the value of their properties and other assets were falling, so people didn't feel confident to spend money, and it slowed an entire country's economic growth. then in 2016, the bank ofjapan went further, taking the extraordinary step of cutting rates to below zero. negative interest rates meant that the bank of japan interest rates meant that the bank ofjapan was in some ways paying borrowers to borrow money. and they stayed there for over eight years, hoping that prices will start to rise. inflation finally arrived several years ago, but it was

mainly due to higher food and fuel prices caused by the war in ukraine. in march last year, the central bank moved rates to a range of 0—0.1%, a tiny rise buta a range of 0—0.1%, a tiny rise but a seismic shift in policy. the bank ofjapan finally exited its negative interest rate policy. a few months later, the boj raised interest rates again, this time to around 1.25%, showing their confidence in the country's economic recovery and that inflation is finally back. but that triggered a market sell—off because investors worried that they may raise rates to fast, and also because of a complex impact on the value of the japanese currency. officials have been cautious ever since, officials have been cautious eversince, but officials have been cautious ever since, but they put rates have not .5% today, that is the highest in 17 years and economists think they may raise the cost of borrowing several more times this year. let's return to the world economic forum

in davos in switzerland. the sessions have just closed, with the final plenary finishing about half an hour ago. it's been a consequential week dominated by an absent figure, the new us president donald trump who delivered a remote address to the gathering yesterday. let's hear now from the forum's chief executive officer burga brenda, who's just emerged from leading that final plenary in davos in recent minutes. thank you for making a beeline over to our live position to talk to us afterwards. there is a lot of cynicism about davos, but what it can actually achieve and why you invite world leaders to a small ski resort in switzerland. this week at the end of the week, i'm sure it has been a busy week for you, what can you say it has achieved? i week for you, what can you say it has achieved?— it has achieved? i think we have identified _ it has achieved? i think we have identified the - it has achieved? i think we have identified the areas l it has achieved? i think we - have identified the areas where we can still collaborate in a more fractured and polarised world. there will be fierce

competition between china and the us, but we are soldiering away with business and partners on future pandemics, so we need to collaborate. we have seen with the wildfires in los angeles the stark reminder of what happens if we don't get things right on the climate side. i would also say that the third thing out here isjen ai. today, there is no traffic rules globally. lets not have the algorithms controlling the humans but of humans controlling the algorithms. i controlling the algorithms. i expect you are watching as donald trump delivered his speech yesterday remotely. how would you describe the mood in the room, the mood among the wider at delegates as he made renewed threats to upend the global economic order, talking about tariffs, talking about demanding a cut on the price of oil and demanding interest—rate cuts? 1

oil and demanding interest-rate cuts? ., ., ., ., cuts? i had someone moderating the session. _ cuts? i had someone moderating the session, so _ cuts? i had someone moderating the session, so it _ cuts? i had someone moderating the session, so it is _ cuts? i had someone moderating the session, so it is true - cuts? i had someone moderating the session, so it is true the - the session, so it is true the president spoke, but there was also a dialogue with four global ceos, and i had the pleasure of raising a few questions. it was true it was a very traditional donald trump speech, but i would say that we also have to look at the first period of donald trump or donald trump 1.0, and even if there were questions about tariffs global growth was there. there was also growth in trade, so i think we are in a negotiating phase now where he puts out tariffs, he wants to achieve something, then there will be negotiations, so let's see. ., ., ., see. you want the foreign minister — see. you want the foreign minister of _ see. you want the foreign minister of norway - see. you want the foreign minister of norway so - see. you want the foreign minister of norway so you | see. you want the foreign - minister of norway so you know a thing or two about diplomacy. i wonder what you're reading is of countries that are allies of the us that now find themselves in a more adversarial position

or relationship. but they work together effectively to negotiate a good deal or a reasonable deal with president trump? i reasonable deal with president trum - ? ., , reasonable deal with president trum? ~ , trump? i hope so. ithink it is important— trump? i hope so. ithink it is important to _ trump? i hope so. ithink it is important to stay _ trump? i hope so. ithink it is important to stay cool- trump? i hope so. ithink it is important to stay cool and - important to stay cool and calm, then you have to look at what can you offer that is interesting for the americans? the eu is the largest market in the world, and if you add the uk on top of it, we have a lot of attractive things in the eu. that could be good also for trump and the administration. so i am cautiously optimistic that we will model through this. because the european market is also important for american businesses. {lita market is also important for american businesses. 0k, burga brenda, american businesses. 0k, burga brenda. chief — american businesses. 0k, burga brenda, chief executive - american businesses. 0k, burga brenda, chief executive of - american businesses. 0k, burga brenda, chief executive of the i brenda, chief executive of the world economic forum, go away, have a rest and drink another everything is finished at thank

you. everything is finished at thank ou. . , everything is finished at thank ou. ., , , ., you. that is your reporting scotland — you. that is your reporting scotland today, _ you. that is your reporting scotland today, stay - you. that is your reporting scotland today, stay with l you. that is your reporting | scotland today, stay with us you. that is your reporting - scotland today, stay with us on bbc

hello from the bbc sport centre. novak djokovic says he may have played his final australian open, after he was forced to retire injured in his semifinal against alexander zverev. he had heavy strapping on his upper left leg after injuring it in his quarterfinal but fought hard to take the opening set to a tie break. after zverev won it by 7—5, djkovic decided the pain was too intense to continue. as he conceded defeat to the second seed, some of the fans booed him as he left court for what may be the last time in melbourne. there is a chap who knows? i willjust have to see the season goes. —— there is a

chance. i want to keep