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tv   World Business Report  BBC News  October 1, 2021 5:30am-6:00am BST

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this is bbc news with the latest business headlines for viewers in the uk and around the world. cash crunch on the capital. congress has of a government shutdown with hours to go, but can the wrangling —— but the ringling over us finances continue. wall street take strike, capping the worst month for us shares since the start of the pandemic. negative energy, a tough winter ahead as the economy is a keep —— compete for oil, gas, and coal. plus virtual coins real risks. the imf wants on the $2 trillion cryptocurrency market. —— warns.
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hello. welcome. we start in the us were wrangling on capitol hill over government spending is continuing to unsettle markets. congress has narrowly averted a government shutdown, just hours before a midnight deadline, passing a bill to qi deadline, passing a bill to oi oi services funded until 3 qi services funded until 3 december. now the biden administration faces a battle over its billion—dollar infrastructure spending bill. a vote on that has now been delayed. progressive members of the democrats are refusing to vote for it until they secure a much bigger bill to inject 3-$.5 much bigger bill to inject 3—$.5 trillion into america's economy, with investment in healthcare, education, and healthca re, education, and climate healthcare, education, and climate change. later this month the us will hit its borrowing limit, currently capped at 28 trillion. unless congress agrees to raise the
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debt ceiling, america could default. that has meant that september has been the worst month on wall street since the pandemic began in march 2020. as michelle fleury in new york explains. it as michelle fleury in new york exlains. ., , as michelle fleury in new york exlains. .,, , explains. it has been eight months quarter _ explains. it has been eight months quarter for - explains. it has been eight l months quarter for investors who have plenty of reasons to feel on edge. stocks have pulled back from their all—time highs and there are some key questions hanging over the markets right now. the first is the immediate threat of a government shutdown. stocks are briefly trimmed their losses when us senate passed a stopgap bill to keep the government funded until 3 december. second, you have america's central bank traders preparing for the federal reserve to begin to wind down some of its extraordinary stimulus measures introduced at the start of the pandemic. this, of course, at a time when the economic picture is not a solid as it was and there are mounting concerns about supply change bottlenecks and inflation. the third question mark for investors is a global energy crunch as well
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as china taking a tougher regulatory stance. and we haven't even mentioned the possibility that amidst all the clinical wrangling going on in washington at the moment, well, there is the risk of the first ever us default if congress fails to suspend or raise the debt limit. given all of these issues in the middle of a pandemic, many are forecasting a bumpy path ahead for the markets. , a bumpy path ahead for the markete— markets. let us talk to susannah _ markets. let us talk to susannah streeter, - markets. let us talk to i susannah streeter, from hargreaves lansdown. good to see you. the worst month for markets in the past 18 months in the us. what is your take on it? , ~ ., a, it? yes, i think there are so many different _ it? yes, i think there are so many different factors - many different factors influencing what is going on here. i think it is definitely adding too much more of a feeling of pessimism, specifically for the us economy, the powerhouse of the global economy. because, as you say and michelle fleury pointed out there, we have not only
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rising prices, but lots of indications that growth is slowing. and the fear, i think, of stagflation is now stalking the financial markets. so an error where you have ongoing higher prices but sluggish growth, and economists have revised down there forecast for us growth for the us 616% to five and 6% —— era. because they see all these ongoing issues. this supply chain crunch around the world, gas bills are soaring, energy prices are soaring, and added to that, covid variants as well have depressed the recovery in many parts of the world. so i think adding to that, plus, as well, we have a political stalemate in washington. the canon may be kicked down the road in terms of stopgap funding to keep the government
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open and running, but still there has been no decision on there has been no decision on the debt ceiling —— can. treasury secretary janet yellen had warned it could be catastrophic for financial markets if an agreement isn't reached. i think there is a lot of, that is the reason most so many investors feel rather unsettled right now. given all these huge — unsettled right now. given all these huge factors _ unsettled right now. given all these huge factors at - unsettled right now. given all these huge factors at play, i these huge factors at play, some investors think markets will continue to fall. what is your analysis? {lii will continue to fall. what is your analysis?— will continue to fall. what is your analysis? of course, you can never— your analysis? of course, you can never really _ your analysis? of course, you can never really peer - your analysis? of course, you can never really peer into - your analysis? of course, you can never really peer into a i can never really peer into a crystal ball and say, yes, that is what is going to happen, because there are so many fact is that can come in and even take people by surprise, for example, growth forecasts have been revised up for the uk economy over recent days. however, we look at all the indications for what is happening ahead and i think there isn't going to be a lid kept on inflation, certainly in the short term. and then, of course, we have the tapering thatis course, we have the tapering that is due. so winning the
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financial markets of this drug of cheap money that they have become used to. even the way central banks talk about this, they are so, they tiptoe around this issue with the fear of upsetting bond markets in particular and seeing the borrowing rates of governments rise far too quickly. but, certainly, tapering is definitely on the cards. all indications from the federal reserve. and that could actually prove another mini shock, i think, for the financial markets going forward, because they really are hooked on this drug of cheap money.— are hooked on this drug of cheap money. you mentioned earlier, there _ cheap money. you mentioned earlier, there is _ cheap money. you mentioned earlier, there is a _ cheap money. you mentioned earlier, there is a possible - cheap money. you mentioned earlier, there is a possible us default if congress fails to suspend and raise the debt limit. what is going on there? well, certainly there is, it all wound up with the fact that republicans are nervous about the huge stimulus bill that is going through congress. two different stimulus bills on the table and there is nervousness
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about the sheer cost of that spending. of course, the argument is if you spend big you can propel economic growth and there are certainly you —— lots of sectors and us economy that need a big boost of spending. at the same time, the date has run out for some agreement over increasing the amount of money that the us can borrow and, actually, this is not for money going forward, this is for money that has already been spent, effectively, but there is disagreement with the fact that so many different measures have been, as well, wound into one bill. there has been a short—term temporary stopgap measure to ensure the government can keep operating. but no agreement yet. we have beenin but no agreement yet. we have been in this situation before whereby, we call it the fiscal cliff, whereby it looks like the us economy was teetering at the us economy was teetering at the brink of falling over and there has been agreement at the last minute and i think it is
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really concentrating minds in washington right now. qm. really concentrating minds in washington right now. 0k, good to see as ever. _ washington right now. 0k, good to see as ever. you _ washington right now. 0k, good to see as ever. you for- washington right now. 0k, good to see as ever. you for being - to see as ever. you for being with us. the cost of living could be set to rise further this winter as big economies compete for energy supplies. according to bloomberg, china has ordered its energy foam to secure supplies of oil, gas, and coal at all costs after a spate of power blackouts across the country. today marks the start of golden week, one of the biggest national holidays in china and a time of increased demand for energy. we speak to economist and author linda yueh. welcome to you. how is the well�*s second—largest economy managed to get itself into a situation like this? it into a situation like this? it has been described by some as a perfect storm. what china has been doing is trying to shift away from coal because of climate concerns. in fact, they have pledged to have dieck emissions, that is the height of emissions, within a decade, 2030. what that has meant is actually, domestically, a cut back on coal because most of
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china's coal is actually produced at home and switching to renewables like wind and solar. but what we have seen is, of course, is a rapid increase in energy and coal prices. so as china has this goal and has this, as it were, attempt to move into renewables, the renewables are not quite enough to make up for, even though right now they account for half of china's energy consumption, it is not enough to make up for winning off coal when coal prices are rising so quickly cash winning off. power companies are having to cut back on what they provide because the other part of this perfect storm is chinese regulators do not want higher costs passed on to their consumers. so the inability to switch to something else, using coal—fired power plants to generate electricity, the inability to pass through those costs to factories and consumers means that you just
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end up with rationing and energy companies holding back and that is factories and households, millions of households, millions of households in the north—east of china have experienced outages and even major international companies like tesla have been told they should expect stoppages in terms of power in the coming weeks. that is a pretty significant economic situation which is why, of course, they want to go all out and secure more supplies. linda, china and the uk are both experiencing energy crises, are these country specific or do you think other countries will start to experience them as well? there are country _ experience them as well? there are country specific _ experience them as well? there are country specific factors - experience them as well? there are country specific factors as i are country specific factors as to why the crises might have hit here and in china, but, yes, generally, what you see, we have talked about coal, talked about energy generally, but oil prices are also up pretty substantially. so what you have, well, in some is that
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energy prices are up because major economies are rebounding from covid, so we expect, for instance, the uk to recover to where we were in 2019 by the end of this year. china has already covered to what it lost before the pandemic stop so the increased demand is always going to generate increased demand from energy and on the supply side there are bottlenecks that have been happening, especially around actually shipping. in short, a lot of ships around the world are not quite where they need to be. so when you have both man and supply—side pressures you are seeing this upward impact on energy, but it is the domestic infrastructure, so in the uk the reduction of petrol stations, as well as, think we have seen, a bit of panic buying, and in china's as they have these other environmental goals. i think for those it is interesting the impact in these countries, major countries, sooner than elsewhere, but i would not be surprised at all
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if you do see it elsewhere. and just on china's impact on where it all comes together is, i mentioned, major multinational companies, remember lots of country —— companies, notjust tesla, but apple manufacturer china is one of the, the key gauge of reduction in china is a contraction in the months of —— september. the first time since the economy had an output contraction in manufacturing since february 2020. that was the onset of the pandemic. so while we see the higher energy prices have an impact, we certainly set on the production side. remember, china accounts for one in seven of all manufactured goods that are exported around the world and thatis exported around the world and that is going to have a knock—on impact in terms of import prices in other countries. so whatever is happening there, as well as globally and here at home, i think we are facing some months
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of higher prices to come. qm. of higher prices to come. 0k, linda, a _ of higher prices to come. 0k, linda. a pretty _ of higher prices to come. 0k, linda, a pretty solid - linda, a pretty solid situation. thank you for being with us. shares of australian airline qantas have hit their highest in more than a year on the news the country's travel ban is set to be lifted. the first phase will be focused on residence and permanent citizens being able to leave australia —— citizens and permanent residence. katie silver is following this for us in singapore. great news for many people desperate to get home but also for the airline industry. but also for the airline industry-— but also for the airline indust . ., �* , ~ but also for the airline indust . . �* , . ., industry. that's right. we have been hearing _ industry. that's right. we have been hearing stories _ industry. that's right. we have been hearing stories already i been hearing stories already today people who will be with their fiancees after 20 months as a result of this. a huge use in red to —— in terms of reuniting families, about1 reuniting families, about 1 million reuniting families, about1 million australians live abroad, almost 5% of the population, while there is good news here there is some level of detail that is still lacking. what we understand is
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australians and permanent residents abroad who are fully vaccinated will be able to return to australia and home quarantine as of next month. this is particularly for what is known as the states that have high levels of vaccinations, particularly the most populous states, south wales and victoria. they have also announced they will be lifting caps. these have been very contentious, particularly in the last six months or so since they have been in place. basically a real cup on the number of australians and people generally allowed to enter the country, which has made it all but impossible for australians to return as well as when they are able to get on as when they are able to get on a plane it makes it very, very expensive. those caps being lifted. they have said they will recognise the vaccines abroad, for example, china's sinovac and any�*s covert shield, which had been part of the problem and the issue of discussion as to whether they would accept these —— covid. the exact dates of when this
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will come into force, that is unclear on whether or not airlines are going to be able to ramp up their capacity in time. that is also unclear at this time. time. that is also unclear at this time-— time. that is also unclear at this time. ., ., ., this time. 0k, katie, for now, thank yon — this time. 0k, katie, for now, thank yon big _ this time. 0k, katie, for now, thank you. big tech _ this time. 0k, katie, for now, | thank you. big tech companies are the most valuable in the world, influencing everything we do from browsing to shopping to our ways of working and socialising. some are so powerful they can act more like a government than a traditional company. those are the words of facebook boss mark zuckerberg himself. so are they helping or hurting commuters —— consumers and democracy? that is what aaron heslehurst has been finding out.— aaron heslehurst has been findin: out. ., ., ., , .,~ finding out. you want to break them up. _ finding out. you want to break them up. say _ finding out. you want to break them up, say goodbye - finding out. you want to break them up, say goodbye to - finding out. you want to break- them up, say goodbye to emmers on crime. , .,, ., ., on crime. they operate on pernicious. _ on crime. they operate on pernicious, dangerous - on crime. they operate on - pernicious, dangerous business models — pernicious, dangerous business models. 25 pernicious, dangerous business models. , ., , pernicious, dangerous business models. , . ., models. 25 years ago facebook, goo . le, models. 25 years ago facebook, google. apple. _ models. 25 years ago facebook, google, apple, and _ models. 25 years ago facebook, google, apple, and amazon - google, apple, and amazon didn't even exist. no. they are the most valuable companies in the most valuable companies in the world.
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what you are going to get is better products if you don't have a suite of ossified corporations sitting at the top of these markets.— corporations sitting at the top of these markets. these are our crown jewel— of these markets. these are our crown jewel companies. - of these markets. these are our crown jewel companies. any - crown jewel companies. any other— crown jewel companies. any other country in the world would _ other country in the world would like to have these. pa rt part of the strategy is to buy up part of the strategy is to buy up innovative counterparts and integrate them into their systems and then oftentimes even shut them down.- systems and then oftentimes even shut them down. they buy a loss of small _ even shut them down. they buy a loss of small companies, - loss of small companies, absolutely, and that is a good thing — absolutely, and that is a good thing. look at what amazon has done, _ thing. look at what amazon has done, for— thing. look at what amazon has done, for example, literally created _ done, for example, literally created hundreds of thousands of millions of new businesses. regulators, they approved facebook, buying instagram in 202012, whatsapp in 2014, is that the political appetite to strengthen laws. [30 that the political appetite to strengthen laws.— that the political appetite to strengthen laws. do they need guardrails? — strengthen laws. do they need guardrails? absolutely. - strengthen laws. do they need guardrails? absolutely. do - strengthen laws. do they needl guardrails? absolutely. do they need _ guardrails? absolutely. do they need a — guardrails? absolutely. do they need a privacy regime that is federal? _ need a privacy regime that is
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federal? ~ . , , . federal? absolutely. they have had no constraints _ federal? absolutely. they have had no constraints put - federal? absolutely. they have had no constraints put upon - had no constraints put upon them from a regulatory perspective. this is a serious, serious conversation. it is very difficult about someone in washington, dc to defend these right now that are not on the take from them. you are on bbc news can watch talking news at these times: stay with us, still to come. a bit risky, the imf warns of the rise of cryptocurrency is. in all russia's turmoil, it has never quite come to this. president yeltsin said the day would decide the nation's destiny. the nightmare that so many people have feared for so long is playing out its final act here. russians are killing russians in front of a grandstand audience. it was his humility - which produced affection from catholics throughout i the world, but his departure
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is a tragedy for - the catholic church. this man, israel's right—winger ariel sharon, visited the religious compound — and that started the trouble. he wants israel alone to have sovereignty over the holy sites — an idea that's unthinkable to palestinians. after 45 years of division, germany is one. in berlin, a million germans celebrate the rebirth of europe's biggest and richest nation. the and richest nation. headlines, the australian prime the headlines, the australian prime minister announces
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international borders will reopen. the us congress votes to avoid a shutdown and planned to avoid a shutdown and planned to vote on the 1 trillion infrastructure budget does not. now to be fine the imf notes the value of cryptocurrency past the tree didn't —— to trillion dollar mark, a tenfold increase since 2020. despite the popularity, the offer till protection and the imf says that 7000 tokens have disappeared. we talked to eight technology writer and filmmaker. a stark warning from the imf, are they right, in your you view? i the imf, are they right, in your you view?— the imf, are they right, in your you view? i think they are not wrong _ your you view? i think they are not wrong in — your you view? i think they are not wrong in pointing - your you view? i think they are not wrong in pointing out - your you view? i think they are not wrong in pointing out that l not wrong in pointing out that the cryptocurrency system is
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unstable and needs more stability and we can't throw the eggs in one basket at this point in time. there is still a ways to go to call the ultimate financial tools. 50 ways to go to call the ultimate financial tools.— financial tools. so what do cryptocurrency _ financial tools. so what do cryptocurrency have - financial tools. so what do cryptocurrency have to - financial tools. so what do cryptocurrency have to do| financial tools. so what do l cryptocurrency have to do to become legitimate in the eyes of banks and central governments?- of banks and central governments? of banks and central covernments? , ., . governments? first of all, there is — governments? first of all, there is no _ governments? first of all, there is no standard - governments? first of all, - there is no standard regulation that governs cryptocurrency is, no matter which one it is, there is a huge distributed effort worldwide to create standardisation, which is not happening. in this kind of goes against what cryptocurrency stands for which is being not controlled by a single entity. financial models work on the basis of a central authority, someone who governs and has control over money in the flow
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of money and cryptocurrency doesn't do this. the first step is to find a formula to proceed further into the future.- further into the future. many central banks _ further into the future. many central banks have _ further into the future. manyj central banks have discussed creating their own digital currencies, is that the right way forward then?- currencies, is that the right way forward then? now central banks cannot — way forward then? now central banks cannot ignore _ way forward then? now central banks cannot ignore the - banks cannot ignore the emergence of cryptocurrency and since they cannot stop them entirely the next best thing to do is actually figure out if they can have their own cryptocurrency that could perhaps work with their own country. china is doing a lot on this and they are on the edge of releasing their digital yuan, which has been under pilot testing for some time and china could be the first country to release its own cryptocurrency that works with its own yuan. it’s cryptocurrency that works with its own yuan-— its own yuan. it's pretty hard for ordinary _ its own yuan. it's pretty hard for ordinary people - its own yuan. it's pretty hard for ordinary people to - for ordinary people to understand, is a part of the
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problem?— understand, is a part of the roblem? , . understand, is a part of the roblem? . . , problem? there is and there is a lot of misinformation - problem? there is and there is a lot of misinformation and - a lot of misinformation and hype and celebrity ceos and influential people pushing people in a different direction and there are many like that out there so there is a lot of hype and misinformation and i also feel there is a lot of frustration with people who want to invest in places where they will get better returns so all of that compounded is leading to where cryptocurrency is today and i definitely feel there has to be more information and clarity around it. eli information and clarity around it. ., ., information and clarity around it. el salvador has said it was to ado -t it. el salvador has said it was to adopt cryptocurrency, - it. el salvador has said it was to adopt cryptocurrency, how it. el salvador has said it was i to adopt cryptocurrency, how is that going? el to adopt cryptocurrency, how is that going?— that going? el salvador, they have made — that going? el salvador, they have made bitcoin _ that going? el salvador, they have made bitcoin the - that going? el salvador, they have made bitcoin the de - that going? el salvador, they i have made bitcoin the de facto currency to the standard currency to the standard currency and it has not been a very smooth rollout so far, they still have a long way to 90, they still have a long way to go, still standardisation it needs to take place and el salvador is a very small
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country and they traditionally used the us dollar and they do not have their own currency so for them to adopt bitcoin it has been very easy, but they still have a long way to go and to connect bitcoin with how the country works, the economy of the country works and how it p995 the country works and how it pegs with imports and exports, i think they are not there yet but it is a great first step. many recognised institutions are now accepting cryptocurrency, that must be significant for seeing it come into the mainstream?- significant for seeing it come into the mainstream? they are and there _ into the mainstream? they are and there is — into the mainstream? they are and there is a _ into the mainstream? they are and there is a lot _ into the mainstream? they are and there is a lot of _ and there is a lot of hesitation and still is a lot of hesitation and the majority of hesitation and the majority of financial institutions are not accepting cryptocurrency and they have stopped their cards from purchasing cryptocurrency or connecting them with exchanges and you cannot do it with many banks. but some banks are progressive and want to figure out what is on the other side and they want
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to be part of this fast—growing ecosystem. fast-growing ecosystem. what would you _ fast-growing ecosystem. what would you say _ fast-growing ecosystem. what would you say to _ fast-growing ecosystem. what would you say to people - fast-growing ecosystem. what would you say to people who l fast—growing ecosystem. what would you say to people who say they can't see it, touch it, don't understand it, and he listened to all the scams, what would you say to those people? i would say they are right to be hesitant and they are right to be cautious. there is no problem with that. but i also encourage people to go out there and get more information on what cryptocurrency is and how it works and why they function the way they do and what is the future of finance. i believe cryptocurrency would have a huge impact on the future of finance and how we do things in the future and that's why we have a new documentary called the bitcoin dilemma. thank you for being with us today and taking us through the ups and downs of cryptocurrency. ups and downs of c tocurren . . , ., cryptocurrency. that is it from me. cryptocurrency. that is it from me- thank —
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cryptocurrency. that is it from me. thank you _ cryptocurrency. that is it from me. thank you for _ cryptocurrency. that is it from me. thank you for being - cryptocurrency. that is it from me. thank you for being with | me. thank you for being with us. you can reach me at twitter. whatever you were doing, have a great rest of your day. goodbye. good morning. new month, but unfortunately not a new weather story. it looks likely that the beginning of october will be quite an autumnal, unsettled picture, with some rain at times. there will be some brighter interludes as well, but the winds certainly a feature, with plenty of leaves coming down off the trees over the next few days. now, as you can see, friday's weather will continue to see this frontal system moving in over the next few hours. it means first thing on friday morning, it still has yet to clear away from the south east. it will do so, and into the afternoon, we should see some sunshine coming through. so, a better second half to the day. there'll be plenty of frequent showers accompanied by a blustery wind on exposed west—facing coasts of scotland, northern ireland and
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north west england. temperatures ranging from 11—18 celsius. now, as we move out of friday into saturday, low pressure is anchoring itself up into the far north of scotland, and we've got another developing low pushing into the far south west. this is going to bring a spell of, yet again, wet and windy weather. it'll move in from the south west, gradually pushing its way steadily northwards. so, if you start the day dry, it's highly unlikely that you will finish the day dry because that rain is going to continue to push its way steadily north and east. maybe the far north east of scotland will see some brightness for much of the day. the winds picking up as well, gusts in excess of 45—50 mph on exposed coasts. that's going to make it feel disappointingly cool in the cloud, the wind and the rain. moving out of saturday into sunday, that frontal system still to clear away, and low pressure looks likely to park itself into the far north of scotland. the southern flank of the low, we could see the strongest winds, 50—60 mph gusts not out of the question. and that's where potentially the heaviest of the rain is likely to lie for the second half of the weekend. bright and breezy elsewhere, with a scattering of sharp showers on and off throughout the day.
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those temperatures, well, still on the disappointing side, and gales certainly are going to be more of a significant feature close to the area of low pressure. top temperatures on sunday once again between 12—16 celsius. monday into tuesday looks likely to stay with that showery theme, with some blustery winds as well from time to time. it's autumn good and proper. whatever you do, take care.
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good morning and welcome to breakfast with charlie stayt and naga munchetty. our headlines today. scotland yard moves to regain public confidence, as former met police officer wayne couzens begins a life sentence for the murderer of sarah everard. higher energy bills for 15 million households as a new price cap kicks in. so how much more will you pay, and what can you do to keep the costs down? i'll have all the details. scotland's vaccine passport scheme begins operation — affecting anyone wanting to go to a nightclub or a big event like a football match.

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