Davos 2014: What we learned

Swiss mountains from above They went up the mountain, but what did they discover there?

Davos 2014. About 2,500 global leaders and 1,500 business heavyweights have been up the mountain - and now they're heading down again. So what came out of this year's attempt to put the world to rights? Here's a summary.

Iran declared itself open for business

The very fact that the Iranian President Hassan Rouhani was here caused ripples of excitement across Davos. It's the first time in ten years that an Iranian president has attended the World Economic Forum and he came with a message: Iran is ready to engage with the rest of the world, and he wants his country to become one of the ten global economies.

But the statement was treated with some scepticism by the US. Treasury Secretary Jack Lew told the BBC that companies "should proceed with caution".

"I think it would be a big mistake for companies to over-read how open for business [Iran is]", he said.

Forward guidance is under scrutiny

The latest UK unemployment figures on Wednesday showed the rate fell to 7.1%, very close to the threshold at which the Bank of England had said it would consider a rate rise - and much earlier than expected by the Bank's "forward guidance" policy.

As a result, all anyone wanted to know from the Bank of England's governor, Mark Carney, was - is he considering a rate rise?

In a BBC Newsnight interview he said he wasn't, and that the UK's economic recovery "has some way to run before it would be appropriate to consider moving away from the emergency settling of monetary policy".

And he underlined that point in a later briefing. But the BBC's business editor, Robert Peston, pointed out that not all Bank of England policymakers share his view, and that Mr Carney could be outvoted.

The US actress Goldie Hawn speaking at the World Economic Forum Goldie Hawn sprinkled some celebrity stardust on the 2014 WEF

Davos has become touchier and feelier

Increasingly, it's not just business and politics being discussed at the forum. Last year, for the first time, there was a mindfulness meditation session on the programme. This year there were many - including one led by the actress Goldie Hawn - and it was mentioned frequently.

There was a big emphasis on health, with chief executives of multinationals keen to stress how they were helping both their own staff in their "wellness" and the developing world.

The "sharing economy" was suggested as the way forward - the notion of making money out of sharing your car or your house as exemplified by firms such as Airbnd or car-sharing firms like ZipCar.

And in a session on authenticity, a panellist told us that just because our eyes were fully functioning, it didn't mean we could see properly. She compared her description of a tree - big brown thing with leaves - to a description from a blind friend of "a large white presence and when I hug it, it's warm".

Delegates at a mindfulness meeting at the World Economic Forum Delegates at a mindfulness meeting

Technology - job destroyer?

There was a lot of discussion about whether advances in technology would lead to a loss of jobs as more and more things become automated. This led to countless comparisons to the industrial revolution.

And it was surprising just how many - including Google's Eric Schmidt - thought that, although these developments in technology were a good thing, it would result in more people being jobless.

"The jobs problem will be the defining one of the next ten to twenty years," Mr Schmidt said in a small discussion on the sidelines of the Economic Forum.

One participant - who argued that algorithms were already doing most jobs including writing a magazine - came up with a very unexpected argument (for Davos anyway). Imagine the day when all jobs were done by robots, and we were left to choose how we spent our days - without being driven by the need to pay the mortgage. What a radical thought!

A man prepares a sign for the WEF annual meeting

There's potential for a military clash between China and Japan

Japan's Prime Minister Shinzo Abe was here to discuss his economic strategy of getting rid of the country's long standing problem of deflation. The strategy is known as "Abenomics" - not his choice, he hastened to point out.

But what the forum was left discussing - and worrying about - was Japan's relationship with China. Tensions have been rising for some time, but just how bad they are was brought home during the event.

In a private briefing with journalists, Mr Abe said relations between the two countries were similar to that of Britain and Germany just before World War One and that he saw China's increase in defence budget as a provocation.

The chief executive of Renault-Nissan, Carlos Ghosn, told the BBC's Linda Yueh that Japan's business community was pressuring the government to resolve the issue. The award-winning economist Nouriel Roubini has identified a military clash as one of the risks of 2014.

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BBC Business Live


    The markets aren't up to much this morning - seems to be the Russia sanctions issue that's weighing things down. Currently:

    • The FTSE 100 is up 4 at 6811.36
    • Germany's Dax is up 9 at 9663.02
    • France's Cac 40 is down 6 at 4359.61
    • The Pound is down a touch at $1.693 and at 1 euro 26.3.
    ANA PROFITS 08:31:
    Japan scene

    Japan's All Nippon Airways (ANA) has reported a return to profits in the three months to June. The better result was thanks to expansion at a Tokyo airport and changes to its pension plan. Net profit came in at 3.5bn yen (£20m) against a loss of 6.6bn yen. Sales were 10% higher.

    BANKER BONUSES 08:24: Radio 5 live

    Shadow chancellor, Ed Balls, says the previous Labour government should have been tougher on bankers' bonuses. "Most of the criticism of the Labour government from the banking sector and the Conservative party was that we were much too tough on the banks. Now in retrospect, those criticisms were wrong because we should have been tougher," he tells 5 live. He points out that no one at the time was pressing them to crack down further.

    AMAZON INDIA Via Email Simon Atkinson Editor, India Business Report

    The editor of India Business Report in Mumbai emails: "Online shopping is still in its infancy in India but growing fast. The market's led by local players but Amazon is upping its presence - and today said it's investing $2bn in its India operations. But restrictions on e-commerce here mean it can't hold its own stock like it does in the UK and US. - for now at least it is only a 'platform' for others to sell through."

    BAT PROFITS 08:07:
    A pile of cigarettes

    Tobacco giant British American Tobacco reports a fall in profits to £2.6bn in the six months to 301 June from £2.9bn a year earlier. It blames the strength of the pound but revenue is also lower, down 10% to £6.8bn in the period. Volume - which measures the number of actual cigarettes sold - fell 0.4%.

    BARCLAYS PROFITS 07:55: BBC Radio 4

    Back to Barclays profits for a moment as Antony Jenkins also tells Today that staff at his bank are changing their ways: "Staff at Barclays are fully behind what we're trying to do with our culture change programme." He says staff know this is not only "the right thing to do" but also the way to better profits.


    Regulator Ofgem has announced a cut in distribution charges that will mean a £12 a year average reduction in electricity bills. And, incidentally, offers us the opportunity to publish a nice picture of pylons.

    BANKER BONUSES 07:32: BBC Radio 4

    Barclays boss Antony Jenkins tells the Today programme his bank can already take action against mis-behaving bankers: "If someone has done something wrong and performed badly we have the right too claw the bonus back today."

    BARCLAYS PROFITS 07:27: BBC Radio 4

    Antony Jenkins, chief executive of Barclays is on the Today programme: "These are an encouraging set of results... Our capital position has never been stronger."

    ITV PROFITS 07:27:

    ITV boss Adam Crozier says the broadcaster's "share of viewing" improved during its second quarter helped by the World Cup. He says he is confident of ITV's Autumn schedule of both new and returning drama and entertainment will help keep audience figures high. Meanwhile, ITV has benefitted from the economic recovery - specifically an improved advertising market.


    Investment bank income at Barclays fell 18%, reflecting a fall in customers. This follows allegations about malpractice in "dark pool" trading. Essentially, these are private stock markets and are the latest area of banking to be probed by regulators.

    ITV PROFITS 07:19:

    ITV says total external revenues rose 7% to £1.2bn in the six months to 30 June, while revenue from its online, pay and interactive TV unit was up 20% to £67m.

    Barclays logo

    More on Barclays: Statutory pre-tax profit was £2.5bn (2013: £1.7bn), reflecting the fact bank had to set aside another £900m for PPI redress Read the full release here.

    ITV PROFITS 07:10:
    ITV logo

    A strong set of numbers from broadcaster ITV this morning. Annual pre-tax profits are up 40% to £250m in the six months to 30 June compared with £179m for the same period last year.


    Barclays profit before tax is down 10% at £3.84bn.

    Iain Conn

    In all the excitement over bankers' bonuses we nearly forgot this. British Gas owner Centrica has succeeded in its pursuit of Iain Conn, confirming he will become its new chief executive from January 2015, succeeding Sam Laidlaw who is retiring. Mr Conn joins from BP where he has been chief executive, of BP's refining and marketing division,for the past seven years.

    BARCLAYS PROFITS 06:52: BBC Radio 4
    Pedestrians pass a branch of Barclays Bank in the rain in London

    Michael Hewson, chief market analyst at CMC Markets is talking to the Today programme about Barclays interim results - coming up imminently. He says the investment banking arm of Barclays is "not listening" to new boss Antony Jenkins who has been trying to clean up the bank's reputation and practices.

    Nissan car

    It's going to be a bank-heavy day today let's face it, but just to provide a break from all that, the government will be announcing changes in the law that will pave the way for driverless cars to take to Britain's roads next year. The government wants the UK to become a leader in developing the technology. In December, the Treasury said it would create a £10m prize to fund a town or city to become a testing ground for the cars.


    HSBC has told three Muslim organisations it will close their bank accounts. These are the Finsbury Park Mosque in North London, a think-tank on Islamic issues called the Cordoba Foundation based in West London, and a Muslim charity in Bolton called the Ummah Welfare Trust, which works in 20 countries giving aid. HSBC says the decisions were "absolutely not based on race and religion".

    BANKER BONUSES 06:30: Radio 5 live

    More from Ms Mangwana on Wake Up to Money. She says the proposed seven year rule may be more about changing culture in banking and the way in which bankers view their bonuses. But she also points out bonuses are generally paid in tranches that vest over a number of years, already (commonly anything between three and five years). "That's the current formula and there are [already] mechanisms to reclaim those bonuses," she says.


    In case this happened too late for you, Twitter shares rocketed 30% on stronger-than-expected financial results. Revenue more than doubled in the second quarter. Shares rose to $50 in after hours trading. Still down on its high of $74.73, hit in December.

    BANKER BONUSES 06:10: Radio 5 live

    Samantha Mangwana, employment lawyer at Slater Gordon told Wake Up to Money seven years is a long time to hold a bonus and regulators may well find it difficult to reclaim money. It is highly likely bankers will have gone and spent the money already, she says, and have nothing that the Bank of England can reclaim.

    BANKER BONUSES 06:07: BBC World News
    Tom Stephenson

    Those new rules on bankers' bonuses are expected to recommend a claw-back period of seven years. Tom Stephenson from Fidelity Worldwide on BBC World News says they could have been tougher: "One of the suggestions was that bankers could be jailed for a significant fall in profits - that's quite something isn't it. Even so, being able to claw back bonuses for seven years is pretty draconian."

    06:02: Matthew West Business Reporter

    Good morning folks. It's looking like a busy day today. We also have trading updates from ITV and house builder Taylor Wimpey. As always you can get in touch via email at bizlivepage@bbc.co.uk and on twitter @bbcbusiness

    06:00: Rebecca Marston Business reporter, BBC News

    Welcome again to the Live page. We're going to be banking heavy. There's Barclays results - in about an hour - and later this morning the Bank of England will release new restrictions on bankers' bonuses, said to be the toughest in the world. We'll see.



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