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Summary

  1. VW pleads guilty to three charges and pay $3.4bn for emissions cheating
  2. FTSE 100 notches up 12th day of gains
  3. Brexit no longer biggest threat to UK: Carney
  4. Sainsbury's reports record Christmas sales
  5. Get in touch: bizlivepage@bbc.co.uk

Live Reporting

By Chris Johnston

All times stated are UK

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Good night!

Chris Johnston

Business reporter

That's all from Business Live for another busy day. We're back bright and early at 06:00 tomorrow, so do join us then. Thanks for reading.

Wall Street up despite hit to drugs stocks

Wall Street sign
Getty Images

There were slight increases across the board on the three key US stock indexes on Wednesday. 

At close of play the Dow Jones was up 98,75 points or 0,50% at 19,954.28. 

The S&P 500 was at 2,275.32 - a rise of 6.42 points or 0.28%.

And the tech-heavy Nasdaq was at 5,563.65, that's up 11.83 points or 0.21%. 

Energy company shares did well as the price of oil climbed.

However, shares in pharmaceuticals companies took a hit following comments in a spech by President-elect Donald Trump that pharma companies were "getting away with murder" by charging high prices for drugs.    

Trouble afoot?

BBC World Service

Indian flag waving as bird flies past
Getty Images

The Indian foreign minister, Sushma Swaraj, has criticised the e-commerce giant, Amazon, after its Canadian branch was found to be selling doormats featuring the Indian flag, reports BBC World Service.

Using Twitter, she said Amazon should apologise unconditionally and withdraw all such products. Failing this, India would rescind current visas for Amazon officials and not grant any more. 

There has been similar controversy in the past over sales of doormats illustrating Hindu gods.

The row comes at a time when Flipkart, an Indian e-commerce company, is involved in a bitter battle with Amazon over market share. 

No comment

Volkswagen said it will not comment on the findings of US law firm Jones Day's inquiry into the emissions scandal to avoid impeding ongoing investigations. 

Jones Day was appointed by VW's supervisory board shortly after the emissions cheating emerged in September 2015 to oversee an external examination of the affair. 

The law firm had been due to conclude its investigations before the end of 2016 and publish its findings early this year. 

"In order not to prejudice or otherwise impede ongoing investigations, the company will not make any further comment on the Statement of Facts or findings of the work of Jones Day," VW said. 

A recovery of sorts

Pound coins
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Sterling has almost scraped back to the $1.22 level after the dollar's slide in the wake of the President-elect's press conference earlier today. The pound is trading at $1.2197.

Not quite the end of the road...

Theo Leggett

Business correspondent

VW sign
Getty Images

Volkswagen has been humiliated by the US authorities - punished for using illegal software to disguise the level of emissions produced by its diesel-powered cars. Not only has it been hit with heavy fines, but it has also had to plead guilty to criminal charges and sign up to a "Statement of Facts" - an agreed version of events that sets out just what it did wrong.

Taken alongside the $15bn deal to compensate consumers, buy back cars and pay for environmental measures agreed last year, the new fines mean VW will have to pay out $19.3bn in the US alone. That's more than $32,000 for each of the 600,000 cars sold with defeat device software in the region.

Yet the settlement is actually good news for Volkswagen. It was always going to face a hefty bill for trying to deceive US regulators. Now, at least, it knows how much it will have to pay. It is still facing potentially damaging lawsuits from investors and car buyers in Europe, but a large chunk of the legal uncertainty has now been removed.

However, it seems that US regulators are far from finished. Six executives are now facing charges over their alleged role in the affair - and prosecutors have already made it clear they believe senior figures were involved in attempts to cover up what was going on.

So the pressure on the company itself may now ease, but it’s likely some individuals will be holding long meetings with their lawyers.

Retailaggedon awaits

BBC Breakfast

Business presenter Ben Thompson will be up bright and early to bring you those company announcements as they land.

View more on twitter

Allergan on-message

That didn't take long. Brent Saunders, chairman and chief executive of Botox maker Allergan, says his company is "aligned with the priorities of the incoming Trump administration" and wants "to create more jobs in the United States".

Its shares are down more than 2% in New York.

Oil prices jump

Oil pump
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Oil prices posted their biggest gains for more than a month on Wednesday as the dollar weakened following Donald Trump's press conference and on news that Saudi Arabia had cut exports to Asia. 

Brent crude jumped $1.76, or 3.3%, to $55.40 a barrel, while US crude rose $1.73, or 3.4%, to $52.55 a barrel. 

Meanwhile, the EIA said US crude inventories rose by a higher than expected 4.1 million barrels last week. 

Pharmaceutical lobby responds

Back to Trump for a moment. Following the President-elect's comments about the US pharmaceutical industry in today's press conference, the drug lobby says it will work with Mr Trump to improve the marketplace and make it "more responsive to the needs of patients".

'No longer the same company'

Hans Dieter Pötsch
Getty Images

Hans Dieter Pötsch, chairman of VW's supervisory board, said: “When the diesel matter became public, we promised that we would get to the bottom of it and find out how it happened – comprehensively and objectively ... We are no longer the same company we were 16 months ago."

VW still isn't calling it cheating though...

VW's 'deep regret'

Matthias Müller, chief executive of Volkswagen Group, said: “Volkswagen deeply regrets the behavior that gave rise to the diesel crisis. Since all of this came to light, we have worked tirelessly to make things right for our affected customers and have already achieved some progress on this path. The agreements that we have reached with the US government reflect our determination to address misconduct that went against all of the values Volkswagen holds so dear. They are an important step forward for our company and all our employees."

BreakingVW pleads guilty

VW sign
Getty Images

Volkswagen pleads guilty to three criminal charges and will pay $4.3bn (£3.5bn) in fines for emissions cheating and the resulting cover-up.

The German car maker will pay $2.8bn in criminal fines and $1.5bn in civil fines. That is in addition to the $17.5bn already agreed in settlements with car owners, dealers and for environmental cleanup.  

Watch the Department of Justice briefing here.

Bumpy ride

Sterling has now recovered all of its losses today to be flat against the dollar at $1.2177. I guess we have Donald Trump's press conference to thank for sending the greenback lower, rather than boosting the pound.

View more on twitter

Net providers to send 'pirate' emails

Jane Wakefield

Technology reporter

Kodi
Kodi

UK ISPs are to start sending "educational letters" to customers identified as downloading copyright material without paying for it.

It is part of the UK government's attempt to crack down on piracy.

BT, Virgin Media, TalkTalk and Sky have agreed to send the missives, which will be emailed rather than posted.

The controversial move has been years in the planning, and some experts believe it is too late to be an effective deterrent.

Read more here.

FTSE's winter rally has legs

Anglo American mine
Anglo American

Laith Khalaf, senior analyst at Hargreaves Lansdown, comments on the FTSE 100's longest winning streak in its 33-year history: 

"It won’t go on forever, but the winter rally has shown it has considerable legs. It’s not just the miners and international companies benefiting from lower sterling which are sustaining the rally; some domestically focussed stocks are also chipping in, which suggests some optimism towards the prospects for UK companies is driving the market upward too.

"It’s important not to get too carried away with the recent run of good form. Over such a short time frame it’s best to take stock market movements with a pinch of salt, whether they are good or bad." 

Anglo American was again the biggest riser, adding another 3.9%.

Import duty threat

US flag
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The Trump presser has now finished, but we've time for one more post.

The President-elect warned US companies that move production offshore will  face substantial taxes on their products when they are brought into the country. 

"There will be a major border tax on these companies that are leaving and getting away with murder," Mr Trump told the press conference in New York. 

'No foreign deals'

Donald Trump's business empire will do no foreign deals while he is US president, Sheri Dillon tells the press conference.

In restructuring the Trump organisation into a trust to be managed away from his eyes and avoid conflicts of interest, the group has terminated more than 30 pending deals in recent weeks, the Trump lawyer said.

"The trust agreement as directed by President Trump imposes severe restrictions on new deals. No new foreign deals will be made whatsoever during the duration of Trump's presidency," she said. 

Trump 'isolated'

Trump and Dillion
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Donald Trump's attorney Sheri Dillon (pictured right), of the firm Morgan Lewis & Bockius, says the president-elect has "isolated" himself from his businesses. 

She says Mr Trump wants it to be clear that he is not using his presidency for his personal benefit. 

Earlier in the press conference, Mr Trump said he had rejected a $2bn deal in Dubai last weekend, demonstrating he was putting his business behind.   

Carney session ends

Mark Carney and the other members of the Bank's FPC have ended their session at the Treasury select committee, by the way. It all got a bit technical towards the end.

Trump gives up control

Donald Trump
AP

US President-elect Donald Trump says he is voluntarily handing over control of his business empire to his two sons Donald Jr and Eric. 

For complete coverage of Donald Trump's press conference, click here to read our live page.

BreakingFTSE hits another high

The FTSE 100 has ended the day 0.2% higher at 7,290.49 points, which means it is the first time the blue-chip index has closed higher for 12 consecutive trading days. The previous longest winning streak was 11 days in July 2009.

It is also the first time it has closed at a record level for ten consecutive days - the last time was eight days back in May 1997.

These figures are from the London Stock Exchange and are for the period since the FTSE was created on 3 January 1984.

'People have got on with their lives'

Martin Taylor
BBC

Martin Taylor, an external member of the Bank's Financial Policy Committee, has been talking about economic forecasting in the wake of the Brexit vote.

"Economic models are based on what has happened in the past; there is no precedent for a major country deciding to tear up all its trade deals and go off into a new world, which does not have exact contours.

"The mistake that had been made with forecasting is to greatly overestimate the size of that confidence effect on the consumer. The big thing that has happened since Brexit is that people have got on with their lives, thank goodness. Increasingly, they have got on with their lives thanks to consumer credit."  

Carney warns EU on Brexit risks

Kamal Ahmed

Economics editor

Mark Carney has put his finger on one of the biggest debates developing in the City at the moment.

Brexit may hold risks for Britain - the economy and the supremacy of London as Europe's financial capital being two of them.

But the rest of the European Union also faces risks.

And, according to the governor, those risks are greater for the continent.

To be clear, Mr Carney was talking about financial stability, not economic growth - although of course the two are closely intertwined.

If financial stability is compromised, or liquidity conditions deteriorate, then economic growth is likely to be adversely affected.

Read more from Kamal here.

Has the Bank's forecasting improved?

Jacob Rees-Mogg, who remains an ardent champion of Brexit, asks about "group-think" at the Bank, and about how economic forecasting can be improved.

Mark Carney says forecasting has improved since the financial crisis by focusing on what could go wrong, rather than what could go right.

"As you'd expect a bunch of dour central bankers to be, we're focused on the downside, and less focused on how everything could turn out well, but what could go really wrong ... and where can we potentially mitigate that.

"We do have to ask ourselves continually what could go wrong. We dont' have to see a ghost behind every corner, but we do have to ask ourselves what could go wrong."

The Governor adds that before the financial crisis a lot of of forecasting looked at what was right about subprime mortgage securitisation, rather than what could have gone wrong.

BreakingPound pounded

Pound v dollar
BBC

Just a bit of news from the real world for a moment: there's been a sharp fall in the pound against the dollar. It is now down nearly 1% at $1.2045 - a three-month low.

However, this seems to be more about the dollar rising than the pound falling. Sterling hasn't changed much against the euro, while the dollar has also gained against the yen and the euro.

"It’s now looking very precarious indeed for sterling and we could see it drop further as stops are triggered," says Neil WIlson from ETX Capital. "[Sterling] is down another 1% today and is flirting with flash crash lows and could spark more selling."

Risky Trump?

Donald Trump
Getty Images

Anil Kashyap responds to Andrew Tyrie's question about the risks posed to global financial stability by President Trump.

He doesn't think there's been an "appreciable shift" since his election.

Mark Carney says the Bank does follows Mr Trump's Twitter account - as well as that of Mr Tyrie's, he adds. 

Uncertainty

Businesses are not concerned about a change in regulation following the Great Repeal Bill, Mark Carney says in response to a question from John Mann. 

The uncertainty, he says, is about maintaining access to Europe - particularly for financial services.