tv World Business Report BBC News September 23, 2021 5:30am-6:01am BST
this is bbc news with the latest business headlines for viewers in the uk and around the world. lights out! two more uk energy suppliers fail, with warnings of more to come as soaring gas prices plunge the industry into crisis. taper time. the fed says rates may start rising next year, and it could start winding down stimulus as early as november. on the brink — can chinese property giant evergrande survive a $300 billion debt crisis? plus change on the menu — german businesses prepare for life after merkel.
we start here in the uk, where another two energy suppliers have gone out of business — the latest victims of the crisis caused by a huge increase in the cost of gas. the firms are green supplier and avro energy, with 800,000 customers between them. all affected customers will continue to receive energy while a new supplier is appointed by the regulator ofgem. it warns more firms are set to close, potentially affecting millions of customers. bulb, the uk's sixth largest energy company with 1.7 million customers, is already looking at its financial options. our business correspondent colletta smith has the latest. two more energy firms have collapsed. as avro and green call
in the administrators, that clocks up a total of six energy companies folding within the last fortnight. the industry called for help, but the government says they won't bail out suppliers in trouble. in the first instance, the industry has to look to itself and, as you said at the beginning of your question, you know where i stand in these issues, i do not believe that it is responsible government to put taxpayers�* money to companies that... so, that means i don't think we should be rewarding failure. we're now seeing the result of that decision, with a number of other providers teetering on the brink. more than a million customers are now being switched to a new provider, but they're facing the prospect of being charged more. it made me think to have a look around the top it means we have to think about our budgets. robert was with a supplier who went bust a few months ago, so he was automatically transferred. ijust think it's shocking that
a lot of people on probably relatively low incomes, it's going to be such a big factor over the winter. those being moved to a new supplier may be charged at a higher rate, which sarah doesn't think is fair. it would be better if they did, like, alternative plans or caps. nobody wants their energy prices going up, do they? so, i don't really try and think about it much, otherwise it would probably stress me out. there's no comfort for customers from the regulator. they think it's likely that more firms could collapse in the coming weeks. we are in unprecedented cost territory, and i'm afraid, you know, there are many, many factors that have contributed to that, including an increase in international demand, potentially some restrictions around supply, so it's very, very hard to predict how long that will last. the underlying problem of expensive gas is not going away anytime soon. most of us will
see energy bills rise in the next couple of weeks, no matter who your provider, and it comes just as the autumn weather is turning and we will need to flick on our heating more often, so it is going to be an expensive winter ahead. energy bosses say the situation is out of their hands. the real worry is that the sector is so fragile as a whole that players that might be expected to pick up customers are worried about doing so because of the costs of doing it. you know, there's no cash down the back of the sofa anywhere. the government will have to plug that gap and might pay loans to remaining companies to convince them to accept people in flux. as the gas price spike claims more companies. colletta smith, bbc news. james waddell is head of european gas at energy aspects — a consultancy that researches the energy industry. it was seen that this is coming to this week. where do you think we are at going forward?
we are being warned higher energy prices after some time. this situation has been building for a lot of the year, a lot— building for a lot of the year, a lot of— building for a lot of the year, a lot of it _ building for a lot of the year, a lot of it linked to a lack of russian _ a lot of it linked to a lack of russian gas going into the european balance and we have to remember— european balance and we have to remember this is notjust a uk problem — remember this is notjust a uk problem but a euro wide problem and the _ problem but a euro wide problem and the keys and in terms of how— and the keys and in terms of how quickly we can get prices back— how quickly we can get prices back down on the wholesale market _ back down on the wholesale market within europe and the uk depends— market within europe and the uk depends on those increases and russian — depends on those increases and russian supply coming into that balance, — russian supply coming into that balance, and there's a lot at stake — balance, and there's a lot at stake with their. the international energy agency was calling _ international energy agency was calling on russia to ramp up its supply to europe, which is lower— its supply to europe, which is lower than before the pandemic right— lower than before the pandemic right now. lower than before the pandemic riaht now. ~ , , ,, ., ., right now. why is russia not doinu right now. why is russia not doing that. _ right now. why is russia not doing that, do _ right now. why is russia not doing that, do you _ right now. why is russia not doing that, do you think? i right now. why is russia not i doing that, do you think? you are right. _ doing that, do you think? you are right, the _ doing that, do you think? w'm. are right, the european demand has recovered two more or less a pre— pandemic baseline but russia spends about 30 to 40%
of supply is about i7% down compared to pre— pandemic levels. this year we think there has just been some constraints on that ability to deliver gas onto the european market. russia is a very large gas market and it has been consuming a lot of the increases in domestic production this year. that has been one factor tightening the russian market and preventing it from being able to spend that much gas in europe. there should be more gas available but we do have eu lawmakers looking at russia and asking the question to what extent could russia have turned up more, and isn't actually squeezing the market in some sense? , , sense? this is something hit the uk government - sense? this is something hit the uk government cannot l the uk government cannot control, so with more firms on the brink of collapse, what is your outlook in terms of prices going forward, the price that is currently in place, will the government have to let that go, for example? we government have to let that go, for example?— for example? we see a very difficult winter _ for example? we see a very difficult winter shaping - for example? we see a very difficult winter shaping up i for example? we see a very| difficult winter shaping up on the wholesale market for gas prices, there are scenarios in
which europe as a whole could run pretty much dry in terms of its gas supply. we pointed this wholesale prices staying above these retail tabs and above the uk price caps which were basically put the burden onto government in terms of being able to cover these costs. if they're going to transfer customers to more solvent, larger companies, these companies will have to the wholesale price very high levels, and it will be difficult to do so, it will be read on the balance sheet, so it does look like that they will need to be some government intervention to keep those companies financially solvent. thank you for your time. let's go to the us now, where the world's most powerful central bank, the federal reserve, could soon start withdrawing its support for the economy. the fed left its key interest rate near zero on wednesday, but signalled borrowing costs may begin to rise next year — sooner than global markets
have been expecting. the fed also said november could see a scaling back of the $120 billion a month it's been pumping into the markets. as michelle fleury explains, it's down to growing concerns over inflation. inflation is starting to worry the us federal reserve. listen tojerome pal talk to price rises across supply chains. ﬁgs rises across supply chains. as the rises across supply chains. is the economy continues to be open and spending rebound, we are seeing upward pressure on prices, particularly because supply bottlenecks in some sectors have limited how quickly production can respond in the near term.— in the near term. these bottleneck _ in the near term. these bottleneck effects - in the near term. these bottleneck effects have | in the near term. these - bottleneck effects have been larger and longer lasting than anticipated. it leads to revision in projections for this year. further splits are down the middle on whether to raise prices next year. the majority expected rates would stay on hold next year. it is a measure of their worry about
inflation. another key question was the fate of its massive bond buying scheme. the chair said a callback could be announced next meeting in november and tapering on that could be done by the middle of next year. 50 could be done by the middle of next year-— next year. so long as the recovery _ next year. so long as the recovery remains - next year. so long as the recovery remains on - next year. so long as the i recovery remains on track, next year. so long as the . recovery remains on track, a gradual tapering process that concludes around the middle of next year is likely to be appropriate. even after our balance sheet stops expanding, our elevated holdings will continue to support accommodated financial conditions. the $120 billion conditions. the $120 billion condition was launched to soften the blow of the pandemic and has helped support asset prices around the world. that was another topic that he would have preferred not to address and it was a backlash over trading by federal staff who led him to order and ethics review, and when asked about this he said we need to do better and we will. overall, this was — better and we will. overall, this was a _ better and we will. overall, this was a meeting - better and we will. overall, this was a meeting in - better and we will. overall, this was a meeting in which
better and we will. overall, - this was a meeting in which the feds sounded increasingly nervous about inflation. dan kemp is chief investment 0fficerfor europe at morningstar investment management. good morning to you. so, talk us through a reaction to all of this. how did markets diejust the news? this. how did markets die 'ust the news?�* this. how did markets die 'ust the newsvﬁ this. how did markets die 'ust the news? ., . the news? good morning. well, i don't think— the news? good morning. well, i don't think it _ the news? good morning. well, i don't think it was _ the news? good morning. well, i don't think it was that _ the news? good morning. well, i don't think it was that much - the news? good morning. well, i don't think it was that much of i don't think it was that much of a surprise to people, what we have already seen actually is the feds selling some of its less liquid holdings in corporate bond, and we had quite high inflation numbers of people expected the fed to do something and normally it takes hours and days for the market todayjust hours and days for the market today just all of the news, hours and days for the market todayjust all of the news, and for new ideas to form, but i don't think we have seen a huge reaction to this, but it is really important because it indicates that the fed is taking inflation seriously and not just taking inflation seriously and notjust thinking it is something that will pass in the
very near term and that is something we have to take into account. �* , ., , ., account. there's lots of caveats _ account. there's lots of caveats with _ account. there's lots of caveats with this, - account. there's lots of. caveats with this, jerome account. there's lots of- caveats with this, jerome pal caveats with this, jerome pal was talking about the fact that this to a degree will be impacted by politicians in the us passing the huge stimulus bill thatjoe biden has proposed, and there are all these various elements that could change things going forward. ~ ., ., ., ~' forward. when we are looking into the future, _ forward. when we are looking into the future, there - forward. when we are looking into the future, there is - forward. when we are looking into the future, there is an i into the future, there is an enormous amount of uncertainty that they have to cope with, situations change, you get surprises, all sorts of things go on, and that's why when thinking about the impact of this over the long—term, we have really got to take a holistic view, think about what path is more likely, and i think what we do know as investors is that asset prices have been supported by both qe have been supported by both oe and the very low interest rates, and that means that as these things start to fade,
then there is less of that upward pressure on asset prices which may have an impact on the path forward and how people are able to make money from their investments, when there is less support, then there is a chance you will have weaker prices, so we need to take that into account when making investment decisions, we have a wonderful range of investors when we have seen investments perform very well but be careful as you look forward. this well but be careful as you look forward. �* , ., ., ~' well but be careful as you look forward. a ., ., ~ to china next where struggling property giant evergrande faces an $83.5 million interest repayment today. this huge property company has debts of more than $300 billion, and fears that a collapse could become �*china's lehman brothers moment�* triggering contagion around the world — have rattled global markets. but on wednesday investors�* nerves were eased after evergrande struck a deal with one of its creditors, and china�*s central bank injected cash into the financial system.
iris pang is chief economist for greater china at ing. she�*s in hong kong. and warm welcome to you. what are your thoughts on what might happen next with regards to evergrande because we have all been on the edge of our seats this week, thursday, a big day today. talk us through what is happening. is today. talk us through what is happening-— happening. is very important for me to — happening. is very important for me to clarify _ happening. is very important for me to clarify that - for me to clarify that evergrande, it is not really comparable to leeman brothers. it is a property developer although it has a lot of debts on its book, it is not a financial company, let�*s make that very clear. financial company, let's make that very clear.— financial company, let's make that very clear. the reason why eo - le that very clear. the reason why peeple make — that very clear. the reason why people make that _ that very clear. the reason why people make that comment i that very clear. the reason why people make that comment is l people make that comment is because in terms of the scale
and impact, across mainland china ever was a larger collapse, it could have huge ramifications going beyond just the fact that a company has gone under. i think that is the reason for that comment. even now, it reason for that comment. even now. it is _ reason for that comment. even now, it is not, _ reason for that comment. even now, it is not, dumber- now, it is not, dumber comparable, because the chinese government team is now sitting in evergrande, talking about restructuring, and we see the federal bank injecting a lot of liquidity into open markets today, so in china, the situation is different, it cannot end up as a leeman bros because the chinese government will not allow that to happen. it is too big to fail, is that what you are saying? but in
terms of how it is restructured, clearly that is something that will have to happen going forward, there has to be done well because everyone is watching to see how this company is rescued because of what might happen in the future with regards to other companies? yes, i agree. yes, iagree. the yes, i agree. the first thing about restructuring is to think of the non—core business, non— real estate property developing businesses, for example, expressway and pharmaceutical and banks. these are not the core business. this will give some cash back to evergrande to continue their construction. 0nce continue their construction. once they continue their construction, and once they can again sell the properties they will get cash. that issue can be solved gradually. but it
will be a very long period of restructuring.— restructuring. thank you, virus. but _ restructuring. thank you, virus. but was _ restructuring. thank you, virus. but was virus i restructuring. thank you, i virus. but was virus payne, chief economist for greater china at ing. let�*s stay in asia, because china�*s mobile phone giant xiaomi has denied that its devices censor users�* communications. this comes a day after lithuania advised its citizens to dispose of chinese—made phones over security concerns. here�*s our asia business reporter katie silver. it isa it is a most unusual warning indeed. lithuania�*s defence ministry has told consumers there two throwaway chinese mobile phones and to avoid buying new ones. it said they tested the 5g models of china�*s two biggest smartphone makers, thatis two biggest smartphone makers, that is xiaomi and huawei. and it came to xiaomi, which has been dubbed the apple of china, andindeed been dubbed the apple of china, and indeed has seen huge growth in recent years that rivals apple, the defence ministry said its phones can detect and
sensor certain terms, about a50 terms or phrases or up. some of these include "free to bet" or "long live taiwanese independence" or "democracy movement". it also said that wireless technology could be turned off in europe, it could be turned back on remotely without the user knowing. when it came to huawei, lithuania tested the 5g phone into the ministry found that its equivalent of the app store redirects consumers to different e—stores and there they may be prompted to download certain content that is malicious or infected with viruses. now, both companies deny these allegations. xiaomi for its parts as it complies with gdp are, that is of course the big overarching law that governs protection of data and the european union. huawei for its parts is that it follows the laws of the countries in which it operates. now, lithuania and china have been having tensions lately over taiwan, and it seems that these
this is bbc world news. the latest headlines: the british prime minister, borisjohnson has warned the un general assembly, that failing to act on climate change would lead to disaster. india�*s dependance on coal show no signs of declining — as pressure grows for the nation to move away from fossil fuels. let�*s go to germany now — where businesses are facing a voyage into the unknown. for more than a decade and a half, chancellor merkel has been at the helm, steering the country through emergencies such
as the global financial crisis, the european migrant crisis and the economic meltdown in greece, which threatened the european single currency. but after september�*s elections, she�*ll be ready to hand over to a new leader — and german businesses are wondering if they�*re heading into choppy waters. theo leggett reports from munich: below the streets of munich, these chefs are cooking up a bavarian face. the hartzkeller is a popular restaurant in the cellars of the majestic new town hall. times have been tough during a pandemic, but customers are coming back. yet now, for businesses across the country, more changes on its way. country, more changes on its wa . , country, more changes on its wa . ' country, more changes on its wa. ' , ., , way. over the past 15 years here in germany, - way. over the past 15 years here in germany, different| here in germany, different governments have come and gone, but chancellor angela merkel has always been in power. haifa has always been in power. now she is stepping _ has always been in power. now she is stepping down which means for businesses, a new period of uncertainty.- period of uncertainty. these re . ular period of uncertainty. these regular side _ period of uncertainty. these regular side salads - period of uncertainty. these regular side salads were i regular side salads were usually served with the winner schnitzel and some other things. schnitzel and some other thins. ., ~ things. down in the hartzkeller restaurant. _ things. down in the hartzkeller restaurant, manager— things. down in the hartzkeller restaurant, manager peter- things. down in the hartzkeller| restaurant, manager peter says it is important to the new government keeps his taxes low. 0verall he is pretty relaxed to
the prospect of change. i overall he is pretty relaxed to the prospect of change. i think personally _ the prospect of change. i think personally that _ the prospect of change. i think personally that we _ the prospect of change. i think personally that we have i the prospect of change. i think personally that we have had i the prospect of change. i think personally that we have had 15 j personally that we have had 15 years of time now with angela merkel, i am a fan of angela merkel, i am a fan of angela merkel but now it is time to change it all and we will somehow handle it. it is the a 16 year era, and angela merkel and may be the beginning of an era where we have a coalition we never had before. the new government — we never had before. the new government could _ we never had before. the new government could take - we never had before. the new government could take manyl government could take many forms and one possibility generating plenty of discussion is a centre—left alliance, involving the social democrats, the greens and the socialist party. the greens and the socialist -a . ,, , , , the greens and the socialist party. the spd, the greens and the left party — party. the spd, the greens and the left party all _ party. the spd, the greens and the left party all wanting i party. the spd, the greens and the left party all wanting to i the left party all wanting to introduce that wealth tax. that is a tax that has been abolished in almost all countries, but it could be a huge burden on businesses and it would reduce investments and it would reduce investments and it is a hazard for economic growth. it is a hazard for economic urowth. . , it is a hazard for economic i rowth. ., , ., it is a hazard for economic urowth. ., , . ., growth. that is a prospect that even the pragmatic— growth. that is a prospect that even the pragmatic peter- growth. that is a prospect that even the pragmatic peter finds worrying. even the pragmatic peter finds wor in. , even the pragmatic peter finds wor inc. , ._
even the pragmatic peter finds wor inc. , worrying. they say, take it from the — worrying. they say, take it from the rich. _ worrying. they say, take it from the rich. i— worrying. they say, take it from the rich. i mean, i worrying. they say, take it i from the rich. i mean, nobody became — from the rich. i mean, nobody became rich without work somehow, maybe he was lucky. but somehow, maybe he was lucky. bui this— somehow, maybe he was lucky. but this is— somehow, maybe he was lucky. but this is one concern, i guess, _ but this is one concern, i guess, many people here in germany— guess, many people here in germany are afraid of. the reality is — germany are afraid of. the reality is without _ germany are afraid of. tie: reality is without angela merkel, some kind of change is inevitable. and businesses like the hartzkeller simply wait to see who will take charge after the election and the kind of policies they can serve up. theo leggett, bbc news, munich. but looked delicious, didn�*t it? finally — as europe struggles with the effects of soaring gas prices — world leaders are preparing for november�*s cop 26 climate conference in glasgow. the gas crisis is adding urgency to discussions over future clean energy sources. figuring prominently in those discussions is hydrogen power. the european union is channeling half a trillion dollars into hydrogen infrastructure — and there�*s also huge investment by the likes of china and japan let�*s go to new york and speak to andy marsh, chief executive of plug power, which describes itself as the leading provider of solutions for the global
green hydrogen economy. welcome to the programme, andy. thank you, good morning! it rape thank you, good morning! if we aet stuck thank you, good morning! if we get stuck in _ thank you, good morning! if we get stuck in straightaway, i get stuck in straightaway, hydrogen is pretty hard to transport and store and also you have got this complicated process of splitting the oxygen from the hydrogen atoms that can be expensive. so it is not really a game changer, you would say? t really a game changer, you would say?— really a game changer, you would sa ? ,, would say? i think i disagree, sall . if would say? i think i disagree, sally- if you _ would say? i think i disagree, sally. if you look— would say? i think i disagree, sally. if you look at _ would say? i think i disagree, sally. if you look at the i would say? i think i disagree, sally. if you look at the cost i sally. if you look at the cost of hydrogen, especially green hydrogen, it is tied to three elements. what is the cost of renewable energy, and if you can purchase renewable electricity for about 3 cents per kilowatt hour, green hydrogen can be very competitive with natural gas. but is it competitive electricity when you look at cars, when you look at trains? and charging up batteries on
your driveway? how does it compete with that? it your driveway? how does it compete with that?- your driveway? how does it compete with that? if you are certain applications, - compete with that? if you are certain applications, by i compete with that? if you are certain applications, by the i certain applications, by the way, i believe the world is going to be a combination of fuel cells and batteries, fuel cells are perfect for commercial applications because you can fuel fast, you can keep that asset on the road. that is why we are doing the jv with renault for commercial vehicles, they run twice as long as batteries, and they are lighter weight. long as batteries, and they are lighterweight. if long as batteries, and they are lighter weight. if you are delivering packages, like people like dhl, they understand if you are going over 150 kilometres, fuel cells are the answer, because that asset is on the road continuously.- asset is on the road continuously. asset is on the road continuousl . �* , , ., continuously. but this is not the silver — continuously. but this is not the silver bullet, _ continuously. but this is not the silver bullet, is - continuously. but this is not the silver bullet, is it? i continuously. but this is not. the silver bullet, is it? would you agree this is not the silver bullet?— you agree this is not the silver bullet? very briefly? i believe it — silver bullet? very briefly? i believe it is _ silver bullet? very briefly? i believe it is one _ silver bullet? very briefly? i believe it is one of - silver bullet? very briefly? i believe it is one of the i silver bullet? very briefly? i | believe it is one of the silver bullets and i think i agree with people i limbo could believe it will be 23% of world energy by 2050. hi
believe it will be 23% of world energy by 2050-_ energy by 2050. all right, i am so sorry to _ energy by 2050. all right, i am so sorry to draw _ energy by 2050. all right, i am so sorry to draw that _ so sorry to draw that conversation to a close because it is a great debate, but we appreciate you staying up for us. all the best in new york. that was andy marsh, ceo of bug that power. you are up to date. hello. wednesday wasn�*t a bad day at all for the greater part of england and wales. but, quite a significant but, a different kettle of fish at least for a time through wednesday in parts of scotland and northern ireland, where you had to contend with the weather front which is bringing this increase in cloud and at times bits and pieces of rain. through into thursday, we�*re going to see quite a vigorous area of low pressure dragging its way over towards southern parts of scandinavia. notice how tightly packed those isobars are. the wind will be a real feature across the north of mainland scotland and especially through the northern isles. it isn�*tjust the strength of the winds, there will be showers if not longer spells of rain. here, we have the gusts and you�*ll see i�*m indicatimg they are 65, possibly 70mph as we get on through the daylight hours of thursday morning. even further south, the gusts really quite significant. wednesday�*s weather front just producing the odd bit and piece of rain
and sufficient cloud across wales for a time and then slumping to the southwest of england. all the while the low pressure moves away from scotland, pulling its frontal system with it. a weak linkage back towards more cloud and rain getting towards the western side of scotland. but with sunshine through wales, the midlands and eastern england through the afternoon, 22, possibly 23 degrees. much of the weather action across the northwestern corner of scotland as we bring new weather fronts in with a low centre close to the eastern side of iceland. through friday, the windsjust beginning to fall back to the west and the southwest — a relatively mild direction. any suggestion of the cold air behind tonight�*s lowjust over the northeast of scotland, that will be pulled away and will all be flooded into this moisture—laden west to south—westerly air flows as you get on through friday. anywhere facing those western shores could well pick up enough cloud for the odd bit of rain, but again, some brightness and could be looking at 22, 23 degrees. come the weekend, it won�*t be west and southwest, it will be south and south—westerly winds which will pump really mild air up and across the greater part of the british isles. it�*s not wall—to—wall sunshine, nor is it dry for everybody. there will be a scattering
good morning, welcome to breakfast with charlie stayt and naga munchetty. 0ur headlines today. the growing impact of the gas crisis — a warning more energy firms could go bust, as millions of houeholds face soaring bills. it�*s time for humanity to grow up on climate change — borisjohnson�*s message to the united nations. we trash our habitats again and again— we trash our habitats again and again with the reasoning that we've -ot again with the reasoning that we've got away— again with the reasoning that we've got away with it so far and therefore will get away with it again — again. good morning. again. — good morning. the future of work. new rules mean you could ask your boss to work flexibly from day one.