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Summary

  1. UK trade deficit shrinks on lower oil price
  2. Circle shares plummet on Hinchingbrooke exit
  3. Tesco credit rating cut to junk status by Moody's

Live Reporting

By Ben Morris and Howard Mustoe

All times stated are UK

Get involved

Ben Morris

Business Reporter

That's it for this week. Have a great weekend and we'll be back on Monday from 06:00.

Psychopaths

World Service

Hitchcock
Getty Images

Are you a psychopath? Take

this simple test and listen to the
Business Daily podcast to find out why psychopathic traits might make you more successful in business.

Money shop closures

More on that Money Shop story. The company hopes to keep compulsory redundancies down by finding new roles for staff, sources say. The firm's reorganisation may also affect its head office. Money Shop's cutbacks follow

the introduction this month of a cap on the costs of loans made by payday lenders.

Via Twitter

South Africa power cuts

Andrew England

Financial Times, Southern Africa Bureau Chief

"The year has barely begun and Eskom has started implementing stage 1 of load shedding today. This will continue until 22:00 this evening."

Money Shop closures

money shop
Getty Images

The Money Shop, a payday lender owned by US firm Dollar Financial, is amid a consultation process to close as many as 200 of its 500 or so stores, sources tell the BBC. That number is the maximum, one person said, and a full consultation process will need to be done before a final number emerges. As many as 350 staff could be made redundant out of a total of around 3,000. Tighter regulation has hit profits across the payday lending sector.

German car sales

VW
EPA

German car makers Daimler and Volkswagen have joined BMW in posting a record sales year. Sales of Mercedes-Benz cars rose by 12.9% to 1.65 million, its fourth straight year of record demand. Volkswagen, Europe's biggest automaker, said sales of its VW-brand cars exceeded 6 million for the first time.

Market update

Shares in London have moved lower during the first half of the session with the

FTSE 100 almost 0.7% lower. Housebuilders continue to be pummelled, after a negative report from analysts at Jefferies.

Expansive air

new airline
AFP

India's newest airline, Vistara, a Sanskrit word meaning "limitless expanse", made its first flight from Delhi to Mumbai as it attempts to attract wealthier customers into a loss-making market. India's aviation market is reckoned by analysts to be the third-largest globally within a decade. It's owned by Singapore Airlines and Tata.

Via Email

Eurozone economics downturn

Jennifer McKeown

Senior European Economist, Capital Economics

"The latest data bode ill for the single currency area. Euro-zone industrial data released next week seems set to reveal that output was broadly flat in November, implying little change in Q4 as a whole. While this would be slightly better than Q3's fall in production, it still suggests that the economy is struggling to expand at all and that spare capacity and the associated deflationary pressure are growing."

McDonald's Japan

mcdonald's
AFP

The operator of McDonald's in Japan is having a rough time. Like-for-like sales slumped 21% in December from a year earlier, due to a shortage of French fries. Meanwhile a customer said she found bits of "dental material" in a McDonald's hamburger. That follows news on Wednesday that

a human tooth had been found in fries sold by another restaurant last year. Pieces of vinyl have also been found in chicken nuggets recently.

Via Email

Dr Heiner Evanschitzky

Professor and Chair of Marketing at Aston Business School

getty
Getty Images

"Tesco are

taking the wrong approach... The stigma around discounters has gone, and this has opened the door to a much larger customer base for them... Where the more traditional retailers can compete is on quality and value. Waitrose have been leading the way in this, steadily increasing their market share as a result - inching up to just under 5% in December. They have succeeded in targeted those shoppers willing to pay more for a few, specific, high quality or luxury items in addition to their cheaper essentials bought at a discount retailer."

Oil exploration cut backs

Oil barrels
Reuters

Barclays is forecasting that oil and gas companies will cut spending on exploration and production by approximately 9% this year. Barclays says that oil companies had been preparing their budgets based on a Brent Crude oil price of $70 per barrel. Today

Brent Crude is trading 29 cents lower at $50.67 a barrel.

Via Email

UK economy

Maeve Johnston

UK Economist, Capital Economics

Brompton bicycle factory
Getty Images

November's industrial production and trade figures provide some encouraging signs that the UK's recovery still had some momentum towards the end of 2014. The improvement in the trade deficit should not be a flash in the pan and the manufacturing sector should benefit greatly from lower costs.

ECB action plan?

euro notes
Reuters

Financial news service Bloomberg is reporting that staff at the European Central Bank have outlined plans to launch a quantitative easing programme worth up to 500bn euros. Several schemes to buy government debt were outlined according to the report.

ECB policy makers are due to meet on 22 January and economists had been expecting them to launch a big effort to boost flagging eurozone economies.

BMW sales

minis
Reuters

BMW sold more than 2 million vehicles in 2014. That includes Minis, Rolls Royce cars and vehicles sold under its own brand. Mini sales were up 20.7% in December. The German car maker even managed 16.7% growth in mainland China.

Via Twitter

UK economy

Jonty Bloom

Business correspondent, BBC News

"

Construction and exports down, exports not that surprising but what is happening to building industry? No shortage of demand for homes"

Via Twitter

Trade deficit

Andy Verity

Business reporter

"

The trade deficit shrank to £1.4 billion in November 2014, from £2.2 billion in October 2014 - says ONS... The falling oil price is a big reason the trade deficit narrowed in November. Not exporting more - but paying less for imports"

Swiss banking

cuckoo clock
PA

The Swiss National Bank said it will post a profit of 38bn Swiss francs (£24.7bn) for 2014 due to gains in the value of its foreign currency and gold holdings. It will keep 2 billion francs for reserves and hand the rest over to its state treasuries. That's a lot of cuckoo clocks.

Shares in house builders down

Shares in house builders have been hit this morning after negative comments in a report from analysts at Jefferies. It cites recent weak data on the housing sector, including data on mortgage approvals and weak house price figures. Jefferies also mentions uncertainty over the UK general election.

Circle dumps Hinchingbrooke

BBC Radio 4

Steve Melton, leader of Circle Holdings, is now on

Today. His firm is facing a report from the CQC on its performance at the hospital, which is a factor in his firm pulling out, he says. The process was "problematic" and his firm expects to "disagree with some of the conclusions, he says. A&E admissions rose and funding was squeezed, he added. How the pull-out transition will actually happens is up to "our NHS partners," he says.

Market update

The

FTSE 100 has started the day with a modest decline, hit by losses for home builders.

Circle dumps Hinchingbrooke

circle
BBC

Shares in Circle Holdings have tanked 27%, changing hands now for 48.63 pence apiece, after announcing that it is exiting the contract to operate Hinchingbrooke hospital.

Northern economy

BBC Breakfast

Chancellor
BBC

George Osborne, the chancellor, is on Breakfast. He's answering questions about the economy in the north of England. "We need to make sure we have a truly national economy," he said. "We don't accept in this country that the gap between the north and south grows."

Circle dumps Hinchingbrooke

Radio 5 live

Hinchingbrooke hospital was brought "right to the edge of break even" says Steve Melton, chief executive Circle Holdings on

Radio 5 live. But the situation is unsustainable he says. He hoped for a more joined-up health service, with more help from GPs and other health providers to keep costs down, but that is "too far away" Mr Melton said.

Pawnbroker results

pawnbroker
BBC

H&T Group, the pawnbroker, said 2014's performance should hit the market's expectations. Last year was difficult because of lower gold prices and competition from other lenders as interest rates fell, it said. The company shut 8 stores and opened one new one.

Restaurant Group

Chiquito restaurant
Restaurant Group

Restaurant Group, which owns Frankie & Benny's and Chiquito, said sales jumped 2.8% in 2014. The outlook for 2015 is "very positive" it said. The firm says wage increases among its customers should help.

German exports decline

German factory
Getty Images

More discouraging economic data from Germany. Exports declined by 2.1% in November. That resulted in a deterioration in Germany's trade balance, cutting the surplus to 17.6bn euros (£13.7bn) in November from 20.8bn euros in October. (

By comparison in October the UK had a trade deficit of £2bn).

Circle dumps Hinchingbrooke

Back in 2011 Hinchingbrooke Hospital in Cambridgeshire became the first NHS hospital to be privately run. But today Circle, the company operating the hospital,
has announced that it will withdraw from the contract. It blamed, among other things, "unprecedented increases" in accident and emergency attendances and funding levels "that have not kept pace with demand".

German industry slows

German steel plant
Getty Images

Economists have been surprised by a fall in German industrial production in November. Output fell by 0.1% from October. In particular energy output declined 2.4% and construction fell 0.6%. Those figures are from the Economy Ministry.

Newspaper review

Business pages
BBC

A look at the business pages. The FT's Lex column points out that Tesco opened 232 stores last year taking its total to 3,378 stores, so the decision to close 43 is a small dent in its overall portfolio. Tesco has upset a lot of people in Dartford according to the Guardian, after abandoning plans to build a store after 11 years of lobbying. The papers are not kind to M&S. "Woeful" is how the Times describes the retailer's Christmas trading statement.

Tesco Wolverhampton

Radio 5 live

"A little angered," is how councillor Peter Billson, deputy leader of Wolverhampton City Council felt when he heard that Tesco was cancelling a big new store in his city. He told

Radio 5 live that as recently as the summer of last year he was receiving assurances that the development would go ahead. Tesco unveiled plans for the store 10 years ago which the council hoped would regenerate a deprived part of the city.

End of train tickets?

BBC Radio 4

The Trainline booking service is seeking to raise £75m in a share sale. Clare Gilmartin, chief executive, is on

Today. Presenter Simon Jack asks when will we have to stop carrying around paper tickets? "I'm very keen to see the end of the paper ticket, it's much better to have it on your mobile phone," she says.

Tesco downgrade

BBC Radio 4

Richard Dunbar of Aberdeen Asset Management is now on

Today, going one stronger about Tesco's debt downgrade by Moody's. "Anybody who didn't know what was in the [Moody's] report was sleeping for the last three years," he says. Ratings agencies are often accused of being late to the party. This was a look in the "rear view mirror" he says. The downgrade means some pensions funds now can't hold Tesco bonds.

Las Vegas gadget show

Radio 5 live

Drone, CES 2015
Getty Images

Zoe Kleinman, BBC technology reporter has been at the

CES technology conference in Las Vegas. But nothing she has been trying sounds particularly new. There are drones there. There's the "internet of things" which tech experts have been touting as the next big thing for years. And Zoe has been riding a motorised skateboard - surely that should be a flying skateboard by now?

Healthcare jobs

Radio 5 live

The latest report from the Recruitment and Employment Confederation shows that temporary and contract jobs in the nursing and medical sector saw the strongest growth of any sector in December. So plenty of jobs, but the pay is low. "It's hard to earn a decent living," says Marc Diamond, who runs a temping agency in the sector. The industry has a high staff turnover he tells

Wake Up to Money.

Tesco downgraded

Radio 5 live

Tesco, Perivale
Reuters

Tesco's credit rating has been cut to junk status by Moody's Investors Service. It says that profits will remain challenged. But on

Radio 5 live Richard Dunbar from Aberdeen Asset Management, says the downgrade "is not particularly helpful" given that there were signs of improvement in Tesco's results released yesterday. He was encouraged by the first increase in fresh food sales in five years.

China deflation?

Radio 5 live

Chinese flag
Reuters

There is a risk of deflation in China this year, BBC Business Correspondent Rico Hizon tells

Wake Up to Money.
Inflation figures for December showed that inflation edged higher to 1.5%, close to a five-year low and that's despite a cut in interest rates and other efforts by Chinese authorities to avoid a slowdown. Economists are expecting further interest rate cuts this year, Rico says.

Ben Morris

Business Reporter

Happy Friday. Tesco has been downgraded to junk status and the Chinese economy is looking subdued - but we won't be. You can email us at bizlivepage@bbc.co.uk and tweet us @BBCbusiness.

Howard Mustoe

Business reporter

Good morning everybody. Welcome to Friday. Coca-Cola says it will cut 1,600 to 1,800 jobs in coming months to reduce costs. Hong Kong stocks are up 1%, And a Japanese woman has claimed she discovered fragments identified as "dental material" in a McDonald's hamburger. More later. Stay tuned.