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Summary

  1. Get in touch: bizlivepage@bbc.co.uk
  2. Sterling above $1.29
  3. Euro retreats from earlier highs
  4. Tesco to cut 1,200 head office jobs
  5. £700m rescue for Co-op Bank
  6. FCA cracks down on fund management fees

Live Reporting

By Karen Hoggan

All times stated are UK

Get involved

Good night

That's it for Wednesday's Business Live.

Many thanks for staying with us.

Please do join us again tomorrow morning from 6am for all the business news, analysis and reaction.

Japanese airline forces disabled man to crawl aboard

Vanilla Airlines plane
Vanilla Airlines/Facebook

Japan's Vanilla Air has apologised after a wheelchair user was forced to crawl up a set of stairs to the plane.

Hideto Kijima had boarded with the help of friends on his outbound flight.

But on the return leg from the island of Amami, airline employees told him that for safety reasons, he would not be allowed to board if he could not climb the stairs without assistance.

In response, Mr Kijima left his wheelchair and pulled himself up the stairs with his arms.

Read more here.

Public sector pay cap under review, No 10 suggests

NHS workers
Getty Images

The limit on public sector salary rises could be reviewed, Downing Street has signalled, as a Labour attempt to scrap the 1% cap was defeated in Parliament.

Two cabinet ministers have said the five-year cap may be reconsidered while the PM's spokesman suggested the autumn Budget could herald a change of course.

Downing Street later sought to dampen down the speculation, insisting current government policy had not changed.

And MPs rejected a Labour motion urging immediate change by a majority of 14.

Read more here.

Wall Street rebounds

The S&P 500 finished higher as financial and tech stocks led a broad market rebound.

The benchmark S&P had suffered its biggest one-day drop in about six weeks on Tuesday after a healthcare bill was delayed in the U.S. Senate.

The Dow Jones Industrial Average rose 0.66% to 21,452.15, the S&P 500 gained 0.88%, rising to 2,440.58, and the Nasdaq Composite added 1.43%, moving up to 6,218.56.

PayPal invests in online loans startup

PayPal has invested in LendUp, a San Francisco-based startup that offers loans online to consumers who have been traditionally overlooked by banks because they are considered too risky.

The firms did not disclose the terms of the deal.

Man loses £1,200 in tech support scam

The UK police and Microsoft have teamed up to tackle IT support scammers who tell victims their computers need to be repaired and then con them out of their savings.

One man told BBC technology correspondent Rory Cellan-Jones how he came to be defrauded.

View more on twitter

Brexit 'will blow hole in budget', EU commissioner warns

Guenther Oettinger
EPA

The UK's departure from the EU will leave a budget shortfall of at least €10bn (£8.8bn; $11.4bn), the budget commissioner has warned.

Guenther Oettinger said the bloc must either spend less or find new money to fill the gap, equivalent to an estimated 16% of the entire budget.

Among the options on the table could be less generous payments to farmers or a tax on financial transactions.

"A big country, a net contributor is leaving," Mr Oettinger said.

"That must have consequences."

Read more here.

EU extends Russia sanctions

BBC World Service

EU flags outside European Commission building
Getty Images

The European Union has formally extended economic sanctions against Russia for a further six months, saying Moscow had failed to live up to its ceasefire commitments, reports BBC World Service.

EU leaders approved the move last week, saying Russia had not halted its support for rebels in eastern Ukraine.

The sanctions target Russia's finance, oil and defence sectors.

Russia criticises the EU for supporting what it calls an illegitimate government in Kiev.

Samsung to build new US plant

Samsung logo with appliances at New Wine and Food Festival 2015
Getty Images

South Korean electronics giant Samsung has agreed to open a $380m (£294m) home appliance manufacturing plant in South Carolina.

The announcement comes amid fears that President Trump's protectionist policies are putting pressure on global companies to create jobs in the US.

In its statement Samsung said the new plant in Newberry County, South Carolina, should create 954 local jobs by 2020.

In February, when news of a potential plant, making the likes of washing machines, first emerged, Trump tweeted: "Thank you, @samsung! We would love to have you!"

Wall Street on track for winning day

Less than two hours ahead of the close the Dow Jones Industrial Average and S&P 500 are on track for their best one-day percentage gain in about two months, boosted by shares in financial firms.

The Dow is at 21,469.07, a rise of 158 points or 0.74%, while the S&P is at 2,441.62, that's up 22 points or 0.92%.

The Nasdaq is up 1.23% or 76 points at 6,222.52 tech stocks make a come back.

A shop by any other name...?

Wimbledon Business Improvement District (BID) tweets

Over the last couple of days we've brought you the story of the Tyneside shop which was forced to change its name from Singhsbury's after Sainsbury's threatened to take legal action. The owner responded by renaming the store Morrisinghs (See post at 7.04am).

Well, in Wimbledon town centre there's been a bit of name tweaking going on as well.

Supermarket chain Morrisons has changed the name of its branch to Murrisons ahead of the tennis championships which begin next week.

View more on twitter

Sugar plant cannabis smell investigated

Medicinal cannabis at British Sugar plant in Norfolk
British Sugar

A sugar producer is investigating whether its cannabis farm is responsible for a smell which has been baffling Norfolk residents for a week.

British Sugar began growing a non‐psychoactive variety of cannabis at its Wissington plant this year for use in children's epilepsy medicine.

Following its harvest, people began complaining about the smell of "weed", the Eastern Daily Press reported.

The company said it is taking comments "seriously" and investigating.

British Sugar began cultivating the cannabis - which produces the active medicinal chemical cannabidiol - after phasing out its tomato production at the site.

The company finished harvesting it on Friday, a spokeswoman said. Read more here

Under-screen fingerprint sensor unveiled

Smartphone
Vivo

Qualcomm has announced a fingerprint ID sensor designed to be fitted underneath smartphone and tablet screens.

It said the component could also work with wet fingers or underwater and could be used to measure heart rates.

The development paves the way for Android device-makers to be able to achieve sleeker designs.

However, one expert said Apple could still beat Qualcomm to market with a rival screen-integrated sensor of its own.

Fingerprint sensors are used to unlock devices without having to type in a code, to authenticate payments and to provide other identity checks. Read more here

What did Mark Carney mean?

Chief economic adviser to economic forecasting group, the EY Item Club, tweets

More analysis now of the Bank of England governor's speech earlier today, as commentators examine what he really meant.

View more on twitter

Loan costs to leap

BBC personal finance correspondent tweets

Sterling holds onto gains

Pound, euro and dollar notes
Getty Images

Let's check in on the pound - and it's still ahead following those earlier comments by Mark Carney, which hinted at an interest rate rise if business investment and wages started to improve.

The pound is 1% ahead against the dollar at $1.2943.

Meanwhile, it's at 1.1379 euros, a rise of 0.66%.

Schadenfreude?

Wolfgang Schaeuble
Reuters

German Finance Minister Wolfgang Schaeuble has said he hopes the UK will come to realise that it made a mistake with Brexit.

"I hope that the rest of Europe will do so well that the British realise at some point that they made a mistake," Schaeuble said in Berlin.

"Whether two years will be sufficient I'm not sure," he added, in reference to the deadline for Britain's exit.

FTSE 250 ends day lower

On the FTSE 250 Stagecoach fell by 6.2% after it after it reported a plunge in annual profits.

It said pre-tax profit fell from £104.4m to £17.9m.

However, the biggest fall on the index was posted by Petra Diamonds - down by 8.73% after it warned that its full-year production will be between 8-9% below its forecast of 4.4 million carats.

The FTSE 250 ended the day 0.26% or 50.45 points lower at 19,476.35.

Companies in the news

Let's see how shares in some of the companies in today's news have performed.

Tesco finished 1.6% higher after it announced it was cutting 1,200 jobs at its head office in Hertfordshire. The company says it has to reduce costs in the face of tough market conditions.

Following confirmation by City watchdog the Financial Conduct Authority that investors must be quoted an "all-in fee" to make charges more transparent, shares in investment firms have dropped.

Hargreaves Lansdown fell by 2.3%, property investment and development company Segro was down 2.08% and Scottish Mortgage Investment Trust was down by 2.03%.

FTSE falls as sterling rises

London Stock Exchange sign
Getty Images

In London the FTSE 100 share index closed down on Wednesday, as the pound jumped.

It's dominated by export-led companies which benefit from a low pound.

The FTSE 100 finished at 7,387.80, that's a fall of 46.56 points or 0.63%.

Blue Apron slashes launch expectations

Matt Salzberg
Getty Images

The biggest meal-kit company in the US, Blue Apron, has cut the valuation expectations for its stock market launch by a third to $11 (£8.50) per share, as Amazon's £10.5bn deal to buy Whole Foods Market put pressure on prospects for the meal-kit industry.

Potential investors are worried about the impact of Amazon's Whole Foods deal, but also about Blue Apron's costly marketing strategy and lack of profitability, sources told Reuters.

"Amazon's deal for Whole Foods earlier this month added to concerns, but Blue Apron's high marketing costs were a negative factor. Snap Inc's IPO earlier this year has shown investors that growth at all costs is a mistake," said Kathleen Smith, principal of Renaissance Capital.

Blue Apron delivers packages of ingredients for easy-to-cook meals. It was founded by Matt Salzberg (pictured).

French bank and supermarket targeted by cyber attack

BBC World Service

Exterior of BNP Paribas branch
Getty Images

France's biggest bank, BNP Paribas, and the French supermarket chain Auchan are among the latest victims of Tuesday's cyber attack that has been spreading around the world, reports BBC World Service.

Some businesses in Asia, including India's largest container port, have also reported disruption.

Experts say the attack seems to have been aimed mainly at businesses in Ukraine, and the effects spread globally from there.

The hackers sent a message to victims saying their computers would remain frozen until a $300 ransom was paid. But security researchers say the attack was probably aimed at causing disruption rather than seeking financial gain.

Technicians say they've developed a means to fix individual computers, but are still working on how to stop the crippling ransomware from spreading.

Cyber attacks 'more sophisticated'

A wave of cyberattacks hitting Europe and North America are similar to last month's WannaCry ransomware havoc, but appear potentially "more sophisticated", Europol said.

Describing it as "another serious ransomware attack", the European police agency's director, Rob Wainwright, said there were "clear similarities with the WannaCry attack but also indications of a more sophisticated attack capability intended to exploit a range of vulnerabilities".

Air India to be privatised

Air India plane on ground
Getty Images

India's cabinet has approved plans to privatise indebted national flag carrier Air India, which has been struggling in the face of growing competition from low-cost rivals.

Air India was bailed out in 2012 with about £4.5bn of federal funds.

Muddying the waters?

More comment on Mark Carney's speech in Portugal which indicated that interest rates could rise if business investment grows.

The picture is now pretty muddy. Only last week Mr Carney said ‘now is not the time’ to tighten. Deputy governor John Cunliffe said only today that there is no rush to raise rates. So we are left guessing – the MPC does not seem to know where it’s at and the debate is taking place in public. This ought to play out in more vote splits over the summer before a move to ‘correct’ its policy mis-step perhaps by the autumn, assuming economic growth and wage growth holds.

Neil WilsonSenior market analyst, ETX Capital

'Clearest signal yet' of rate hike

Mr Carney said he would back a rate hike if business investment and wages started to improve. Coming off the back of the 5-3 split at the last (Monetary Policy Committee) meeting and hawkish comments from the Bank’s chief economist, Andy Haldane, it’s the clearest signal yet that the Bank is minded to tighten. There is a sense the Monetary Policy Committee may wish to ‘correct’ its rate cut last summer in light of a surprisingly resilient UK economy and rising inflation, which is accelerating quicker than the Bank expected.

Neil WilsonSenior market analyst, ETX Capital

Forex markets ignore Carney 'nuances'

Some comment now on the jump in sterling which was prompted by Bank of England governor Mark Carney's speech.

A caveat-laden statement from Mark Carney... caused a super-surge from sterling this Wednesday. Investors were uninterested in the nuances of what Carney was actually saying, focusing on the fact that the BoE chief said ‘some removal of monetary stimulus is likely to become necessary’ but ignoring that the central banker made it clear A LOT of things, like UK wage growth and business investment (not to mention Brexit), need to move in the right direction for that to happen.

Connor CampbellFinancial analyst, Spreadex

Pound leaps on Carney comments

Pound dollar intraday graph 29 June 2017
BBC

The pound has jumped by more than 1% against the dollar to $1.2946 following comments by Bank of England governor Mark Carney hinting that interest rates could rise if stronger business investment boosts the UK economy.

Speaking at the European Central Bank Forum on central banking in Portugal Mr Carney said "some removal of monetary stimulus is likely to become necessary", but would depend on whether an increase in business spending could counter the slowdown in consumer consumption triggered by rising inflation.

The comments are more hawkish than Mr Carney's Mansion House speech last week when he said "now is not yet the time to begin that adjustment".

EU needs to 'spend less or find new money' post Brexit

BBC World Service

EU flag and Union Jack
Getty Images

The EU's budget commissioner Guenther Oettinger has warned that the bloc must either spend less or find new money from somewhere to cope with the loss of about £9bn a year when the UK leaves.

That's 16% of the entire EU budget. Presenting the fifth and final discussion paper on the EU's future, Mr Oettinger said each euro spent must have a positive impact on people's lives.

The BBC's Europe reporter says the disappearance of Britain's annual rebate will make the budget process simpler.

Wall Street ahead at start of trade

Wall Street sign with US flags behind
Getty Images

All three key US share indexes opened higher on Wednesday.

The Dow Jones is at 21,408.83, that's a rise of 98 points or 0.46%.

The S&P 500 is at 2,429.27, up 10 points or 0.41%.

And the tech-heavy Nasdaq is at 6,150.54, that's up 4 points or 0.06%.

Switzerland to tighten capital requirements for smaller banks

The Swiss federal government plans to tighten capital rules for the country's three most important domestic lenders to ensure taxpayers don't have to bail them out in the event of a financial crisis.

It's proposing to extend "gone concern" rules - that is capital needed to insure against the costs of bank failure - beyond big banks UBS and Credit Suisse to include primarily domestic lenders PostFinance AG, Raiffeisen and Zuercher Kantonalbank.

"Like for the big banks, they should reflect the going concern capital requirements, but only 40% of them. With this proposal, the (federal government) is taking into consideration the fact that the banks in question are less interconnected internationally and are thus less systemically important," it said in a statement.

The government has instructed the finance ministry to work with the FINMA watchdog and the Swiss National Bank (SNB) on a draft of the proposals.

Euro down against pound

And as this graph shows the euro has had a bit of an up and down day against the pound.

It's currently down 0.18% at 88.31 pence.

intraday graph euro pound 28 June 2017
bb

Euro loses ground

Here's what the euro has been doing against the dollar so far today - after hitting 12-month highs it's now edged down slightly to $1.1336.

Intraday euro -Dollar 29 June 2017
BBC

Can the minimum wage rise too fast?

Minimum wage protester
Getty Images

It's generally thought that increases in the minimum wage have little impact on employment. The UK is a good example, where the minimum wage has been rising in recent years, yet unemployment remains low.

However economists interested in this area have been keeping a close eye on Seattle. The US city made sharp increases in the minimum wage in 2015 and 2016 and recent research has shown that it may have cost low-wage workers.

You can read more here.

Draghi comments misinterpreted?

The euro fell and government bond yields across the eurozone fell back from earlier gains on Wednesday after central bank sources told press agency Reuters that the market had over-analysed earlier comments from Mario Draghi.

Sources told the media organisation that ECB chief Draghi had intended to signal tolerance for a period of weaker inflation, not an imminent policy tightening.

The ECB declined to comment.

Comparing public and private sector pay

Reality Check

Chart showing growth in public vs private sector pay
BBC

Conservative MP Sir Oliver Letwin has been on Radio 4 talking about when the freeze on public sector pay rises may be relaxed.

"Sooner or later there will need to be some movement on the rate of increase of public sector pay because we're getting close... to the point at which the huge increase in public sector pay compared to private sector pay which we inherited in 2010 is leveling out," he said.

You can see what he's talking about in the chart above - around 2010, average earnings in the public sector were growing at about 4% while in the private sector it was barely moving. That situation has clearly reversed since mid-2013.

But there are caveats when comparing public and private sector pay. For example, many public sector bodies have outsourced lower-paid functions such as cleaning and catering to contractors, which moves them from the public to the private sector. Doing so on a large scale would increase average earnings in the public sector.

The Institute for Fiscal Studies has warned that the quality of public services will suffer if public sector pay continues to fall compared with the private sector.

Listen: Qatar may face more sanctions

BBC World Service

Pay more, get less?

Simon Gompertz

BBC personal finance correspondent

FCA logo
Reuters

Are you shocked at the charges which some fund managers are skimming off your savings? If you look at what the financial watchdog has sniffed out, you probably should be.

The total levied amounts to 1.5% a year on a typical share-based investment fund, in which the manager picks the shares. It can be confusing. There is a headline charge, then often other fees on top.

What are you getting for that? After all, you could be in a tracker fund which automatically follows a share index, charging just 0.2%.

The Financial Conduct Authority found that on average, the cheapest funds generated higher returns than the most expensive ones.

Of course, an individual whizzkid manager might achieve stellar returns. But, typically, the more you pay, the less you seem to get.

Full story here.

Cyber-attack hits Europe's biggest container port

Rotterdam container terminal
Getty Images

One of Europe's biggest container terminals has resorted to using Gmail and What'sApp to keep its operations going today.

That's after the cyber-attack that has hit companies all over the world took down its computer systems.

APM Terminals, which is part of Danish shipping giant Maersk, has been operating without internet and phone links.

"All our people are in place, and the terminal is open," APM spokesman Tom Boyd told the news agency AFP.

"Today we are handling 4,500 containers. It's more labour extensive, but we are making it work. We are communicating with our customers through gmail and other things because the IT system is down."

Rotterdam is Europe's biggest port and one of the biggest in the world.

Michael Bond dies

Paddington Bear
Getty Images

Michael Bond, the creator of Paddington bear, died at home aged 91 on Tuesday following a short illness, his publisher HarperCollins said.