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Summary

  1. Get in touch: bizlivepage@bbc.co.uk
  2. Trump doubles tariffs on Turkey's steel and aluminium
  3. Turkish lira hits record low
  4. Sports Direct buys House of Fraser
  5. UK GDP grows 0.4% in second quarter
  6. Strike-hit Ryanair cancels flights

Live Reporting

By Dearbail Jordan

All times stated are UK

Cheerio

That's all from the Business Live page for another week. See you on Monday at 06:00.

Have coders created a gig economy nightmare?

Uber
Getty Images

An interesting think piece in Vanity Fair asks whether Silicon Valley software engineers have created a monster in the form of the gig economy

"The risk... is that the gig economy will become the only economy, swallowing up entire groups of employees who hold full-time jobs, and that it will, eventually, displace us all," writes Susan Fowler.

"The bigger risk, however, is that the only people who understand the looming threat are the ones enabling it."

Turkey 'needs to raise rates'

What can Turkey do to halt the slide in the euro? Many analysts are saying a rate rise is necessary.

Aberdeen Standard Investments Senior Investment Manager Viktor Szabo says:

"The short term solution is simple: raise interest rates aggressively and rein in credit to cool down the economy and bring inflation into check. Send a clear message to investors that the problem is understood and will be decisively addressed.

“Most of the economic pain that Turkey is experiencing is self-inflicted. Turkey has proven time and again that it cannot sustain high levels of growth without issuing more debt. Given domestic savings are so low, this debt is in US dollars and has the inherent exchange rate risk that comes with it. So it is no surprise that the monetary and credit stimulus that followed the failed coup in 2016 has led to a rapid widening of the current account deficit, inflation getting out of control and the country on the brink of a currency crisis."

Ryanair strike: Your rights

Ryanair plane
EPA

Kate Hobson of Citizen's Advice has the following to say to people affected by the Ryanair strike:

"If you’ve been unlucky enough to have your flight cancelled then you are entitled to a refund if you were given less than two weeks’ notice.

"If you still wish to travel you may be able to get compensation."

Markets fall after Lira plunge

London Stock Exchange
Getty Images

The plunge of the Turkish Lira spooked markets as investors raced for safer assets such as the yen and US government bonds.

The currency has fallen more than 40% this year, fanning worries about a full-blown economic crisis.

The FTSE 10 closed down 0.99%, the Dax was down 2.05% and the Cac40 was down 1.78%.

Erdogan 'gives the lira a whack"

Turkish President Tayyip Erdogan has "reached for the crazy stick and given the lira another whack in a rambling speech that focussed more on combative rhetoric than addressing market concerns," says Ranko Berich, head of market analysis at Monex Europe.

"Normally when a currency falls 10% in a day, political and monetary authorities scramble to promise fiscal discipline and central bank independence," he says.

"There’s a whole universe of puns and jokes to be made about today’s events, and Erdogan’s speech crossed well into farcical territory when he asked supporters to look under their pillow for FX reserves.

"But today’s events are at least as tragic as they are farcical; five years ago Turkey was an attractive investment destination well on its way to being a developed economy within a few decades. The cataclysmic depreciation in TRY over the last year illustrates the extent to which this optimism has given way to turmoil."

Shares in European banks drop

Istanbul
AFP

Investors are getting rid of eurozone bank shares after concerns about their exposure to Turkey as the lira fell to yet another record low.

Shares in BBVA were down 5.7%, UniCredit was off 6.4% and BNP Paribas dropped 4.4%, all exceeding a 4.3% drop in the eurozone bank index.

'Sign of a full-blown crisis'

Turkish President Tayyip Erdogan failed to calm nerves with his speech, notes Neil Wilson, chief market analyst at Markets.com.

"Calling on citizens to exchange dollars, euros and gold for lira is a sign of a full-blown crisis," he says.

"The situation remains on edge and we do not know whether there is any chance of a stabilising influence – the Turkish central bank now appears completely toothless in this fight.

"Contagion is evident in global markets with Turkey the catalyst for a sell-off in stocks.

"The Euro Stoxx bank index skidded more than 4% lower as investors fretted over the exposure of some banks to Turkish debt.

"Ghosts of Greece are still vivid in the memory for European investors and today is the first sign that the problem with Turkey’s larger dollar debts is no longer confined to its borders."

Erdogan calls on Turks to support their currency

Turkish president Tayyip Erdogan
epa

Turkish President Tayyip Erdogan has called on his people to support their struggling currency as its value plunges to new lows.

He called on Turks to exchange their dollars, euros or gold to lira to respond to those who had declared what he called an economic war.

The Turkish lira has now fallen by nearly 20% against the US dollar on Friday, and is down by more than 40% so far this year. At present, one dollar currently buys about 6.53 lira.

Earlier, US President Trump announced a doubling of tariffs on Turkey's steel and aluminium.

US stocks open lower on Wall Street

NYSE trader
AFP

Trading has got under way in New York, and shares have opened lower.

In early trade the Dow Jones Industrial Average fell 175.83 points, or 0.7%, to 25,333.40.

The S&P 500 index dropped 15.09 points to 2,838.49, while the Nasdaq was down 36.78 points at 7,855.00.

US prices edge up in July

US shopper
Getty Images

Prices faced by US consumers rose slightly in July, according to the latest official data.

The Labor Department said prices rose 0.2% last month, while prices over the year to July were up 2.9% - the same annual rate as the month before.

So-called core inflation - which strips out food and energy costs - rose at annual rate of 2.4%. That was up from 2.3% in June and was highest figure since September 2008.

The steady pick-up in inflation means analysts expect the US Federal Reserve to increase interest rates when it meets next month.

The Fed has already raised rates twice this year.

The 'Harrods of the High Street'

Mike Ashley
Getty Images

Mike Ashley has big ambitions for House of Fraser.

In a statement to investors, the Sports Direct owner says:

"My ambition is to transform House of Fraser into the Harrods of the High Street."

Trump doubles tariffs on Turkey steel and aluminium

Turkish lira crashes to record low

President Erdogans
Reuters

Turkey's lira plunged as much as 14% on Friday as worries about President Tayyip Erdogan's influence over monetary policy and worsening US relations snowballed into a market panic that also hit shares of European banks.

The sell-off has deepened concern about exposure to Turkey, particularly whether companies will be able to pay back loans taken out in euros and dollars after years of overseas borrowing to fund a construction boom under Mr Erdogan.

Fakeover or takeover?

Elon Musk
Getty Images

Elon Musk is "no longer scaring the shorts" as Tesla's share price sinks back down almost to the level it was before he tweeted about taking Tesla private, Bloomberg reports.

"I doubled my short position the morning after Musk’s original tweet,” Robert Chapman, money manager at Chapman Capital, told Bloomberg.

“The more one learns about this situation, the more this appears to be a fakeover vs. takeover.”

FTSE and pound still lower

City trader
Getty Images

A quick look at the markets and the FTSE 100 share index remains lower, down 49.14 points, or 0.6%, at 7692.63.

Russian gold miner Evraz is still the worst performing share in the index, down more than 9%, as investors react to the latest US sanctions.

On the currency markets, the pound remains below $1.28, down 0.4% for the day at $1.2767. However, it is up against the euro, rising 0.2% to €1.1143.

Union: 'We fear for jobs' at House of Fraser

The Unite union has expressed its concern at Sports Direct's takeover of House of Fraser.

"Sports Direct is a leopard that has not changed its spots and we hope that its poor record on pay and employment practices are not transferred to the House of Fraser," said Unite regional officer Scott Lennon.

He said Sports Direct's record at its Shirebrook warehouse had been "dreadful", with low pay and poor employment conditions.

"The company does not want to engage in any meaningful sense with Unite at Shirebrook and this obviously sparks concern at the fate that awaits the House of Fraser staff under the new ownership," Mr Lennon said.

"We fear for jobs and employment conditions at the House of Fraser going forward. The staff are entering a period of great uncertainty and worry."

Sports Direct and House of Fraser - an odd couple?

Kate Hardcastle
BBC

Kate Hardcastle from the retail consultancy Insight with Passion, told the BBC that Sports Direct's rescue of House of Fraser "is a big move and I'm sure lots of people will be breathing a slight sigh of relief that the name House of Fraser isn't disappearing from the high street altogether".

However, commenting on the pairing of Sports Direct and House of Fraser, she says: "I can't imagine that the business or indeed its offer are going to be similar to that people know or recognise as House of Fraser - this is someone who deals very much in the discount market."

She adds that Mike Ashley was unlikely to keep all the stores he'd just bought: "It is an interesting development. I don't think it will be the full portfolio of property. I think it will be the stores that are trading well that he carries forth."

Keep Wolves store open, says former John Lewis boss

Mike Ashley, the tycoon behind Sports Direct, has bought House of Fraser
Getty Images
Mike Ashley, the tycoon behind Sports Direct, has bought House of Fraser

Andy Street, the former managing director of John Lewis and now Mayor of the West Midlands, wants to speak to Mike Ashley's Sports Direct, the new owner of House of Fraser, to keep the branch in Wolverhampton open.

View more on twitter

Debenhams shares jump

Debenhams
Getty Images

Sports Direct's shares barely budged on Friday following confirmation that it will buy House of Fraser for £90m. Its share price is down 0.44% at 404.9p.

Meanwhile, department store rival Debenhams has been given a boost and its share price is up 2% at 11.76p.

Overall, the FTSE 100 is down 0.67% at 7,689.87.

The FTSE 250 is off 0.35% at 20,732.42.

Turkey turmoil: Should the eurozone be worried?

Turkish flag
Getty Images

With the value of the Turkish lira plummeting, what will the knock-on effect be for the eurozone if Turkey went bust?

Carsten Hesse, economist at Berenberg, reckons the impact on GDP growth would be "small"

Even if Eurozone goods exports to Turkey were to fall by, say, 20%, this would subtract no more than 0.1 percentage point from growth in the big Eurozone," he says.

He concedes: "A full blown Turkish banking crisis would have some negative repercussions on eurozone banks that have large credit exposure to Turkey or own Turkish banks. But overall, the eurozone banking exposure seems too small to cause a significant Eurozone crisis.

"But even if we are wrong... bank supervisors would have sufficient tools at their disposal to contain the damage."

Butlins guest data 'may have been hacked'

Butlins sign
Getty Images

Holiday camp firm Butlin's says up to 34,000 guests at its resorts may have had their personal information stolen by hackers.

The company says the data in question included names, home addresses, email addresses and telephone numbers.

Managing director Dermot King apologised for the incident and said no financial information was compromised.

Butlin's has set up a "dedicated team" to contact guests who may have been affected.

Read the full story here.

Get the lowdown on rising GDP

BBC News

'Shackles' still on UK economy

The pound v US dollar on Friday
BBC
The pound v US dollar on Friday

Any hopes that on-target GDP figures for the second quarter would boost the pound have been dashed - it is down 0.37% against the dollar at $1.2777.

The pound is, however, up 0.20% against the euro at €1.1144.

Laith Khalaf, senior analyst at Hargreaves Lansdown, says: "A weak pound and strong dollar does have a tangible knock on effect on the UK economy, as we have seen from the wave of closures and profit warnings from the retail sector. Not everyone loses out from weaker sterling though, exporters and the domestic tourist industry should benefit, as do stock market investors, thanks to the international revenue streams of Footsie companies.

"However oil and other commodities are priced in dollars, which means higher energy bills and petrol prices for UK consumers, against a backdrop of weak wage growth, so the squeeze we have seen on discretionary spending looks like it has a bit further to run."

He adds: "All of this suggests the shackles are still on the UK economy, and that spells more or the same in terms of interest rate policy for the foreseeable future."

House of Fraser deal secures 16,000 jobs

Alan Hudson of EY, which was appointed as administrator to House of Fraser this morning and has secured the sale of the department store chain to Sports Direct International, says "We have worked very closely with management, its advisers and creditors in recent weeks and are pleased that we have been able to successfully conclude a sale of the business in short timescales which preserves as many of the jobs of House of Fraser's employees as possible."

House of Fraser employs over 5,900 people directly while an additional 10,100 work at concessions within the stores.

Mr Hudson adds: "It was a challenging transaction to achieve in such a short period of time which will ensure continuity of the business and preserve the goodwill. We hope that this will give the business the stable financial platform that it requires to flourish in the current retail environment."

House of Fraser 'must go more upmarket'

Sports Direct deal 'a hugely ambitious move'

House of Fraser
PA

Richard Lim, chief executive at Retail Economics, says that Sports Direct's £90m takeover of House of Fraser "is a hugely ambitious move".

"The combination of both businesses will yield some vital cost-saving synergies while its likely that some of the struggling House of Fraser sites will be rebranded to Sports Direct."

But he says: "Nevertheless, this is a part of the industry that is under a huge amount of pressure. Turning around the business will not come easy. The stores are failing to attract sustainable levels of footfall while battling against rising operating costs and shifts in shopper behaviour."

UK trade deficit widens

Cargo boat carrying exports
Getty Images

Additional data from the Office for National Statistics show that the total UK trade deficit widened by £4.7bn to £8.6bn in the three months to June due to falling exports and rising imports.

The ONS says falling car and aircraft exports to and from non-EU countries "were the leading factors in the widening of the total trade deficit".

Suren Thiru, head of economics at the British Chambers of Commerce, says: "The deterioration in the UK’s net trade position is further confirmation that we are still some way from achieving a rebalancing of our economy."

He says: “Despite growth in the second quarter, there is little in the latest data to suggest a sustained upturn in the UK’s economic growth prospects, or evidence to corroborate the [Bank of England] MPC’s decision to raise interest rates."

Bank 'right to raise the interest rate'

Bank of England
Reuters

Ruth Gregory, senior UK economist at Capital Economics, says that the latest GDP figures "will reassure the [Bank of England] Monetary Policy Committee that it was right to raise interest rates last week".

She says: "Looking ahead, the surveys suggest that the economy has maintained this pace of growth at the start of the third quarter.

"Of course, Brexit-related uncertainties could intensify over the coming months, if the EU negotiations stall or if Brexit turmoil results in a general election. In the absence those developments, however, we remain cautiously optimistic about the economy’s ability to expand at reasonably solid rates over the remainder of the year."

Take GDP rebound 'with a pinch of salt'

Nancy Curtin, chief investment officer at Close Brothers Asset Management, says: "A rebound in economic growth in the second quarter should be taken with a pinch of salt. Even with some acceleration, the economy is far from its peak.

“However, it’s not all doom and gloom. The consumer is beginning to look a little stronger, supported by wages growing in real terms, and the weak pound has buoyed exporters. Investors will be hoping this trend continues despite the uncertain backdrop.”

House of Fraser rescue in detail

Mike Ashley
Getty Images

Sports Direct International, founded by tycoon Mike Ashley (pictured), has announced that it will buy the business and assets of House of Fraser from the administrators of the department store chain who were appointed early this morning for £90m in cash.

It said: "It has acquired all of the UK stores of House of Fraser, the House of Fraser brand and all of the stock in the business."

It said that for the year to 28 January 2017, the House of Fraser group had gross assets of £946.3m and made £14.7m net profit.

BreakingSports Direct buys House of Fraser for £90m

Mike Ashley's Sports Direct is buying £90m to buy House of Fraser.

Manufacturing output 'weak'

The ONS says that manufacturing growth was weak in the second quarter, specifically in April when output fell by 1.2% before recovering to rise by 0.6% in May and 0.4% in June.

It said: "The quarterly fall was driven by declines in the manufacture of basic metals and metal products, other machinery and equipment and transport equipment.

"This marks the second consecutive quarterly decline in manufacturing output, which has not been seen since the first quarter of 2016."

Pound reacts to GDP data

The pound has regained a little ground against the dollar following the publication of second quarter GDP data - which was in line with expectations at 0.4% - however, it is still trading down at $1.2751.

Whether the weather for construction sector

Construction worker
Getty Images

The services and construction sectors were the main drivers of GDP growth in the second quarter, according to the ONS.

For construction, its output grew by 0.9% between April and June after it was hit hard by the severe weather during the first three months of the year.

However, growth is below the 1.1% quarterly average for 2017.

The ONS says: "While there was some anecdotal evidence from a small number of businesses suggesting that the favourable weather in June had helped boost construction activity, overall it is difficult to determine if this is a result of the warm weather or a bounce back effect following a weak first quarter."

Underlying growth slows

The ONS says that the warm weather and the World Cup helped boost economic growth in the second quarter.

However, it adds that "the underlying trend in real GDP is one of slowing growth".

It said: "The UK economy grew by 0.6% in the first half of 2018, compared with the second half of 2017 – continuing the declining trend seen since the second half of 2014."

UK GDP growth
ONS
The underlying trend in real GDP is one of slowing growth, says the ONS

BreakingUK GDP grows 0.4% in second quarter

The UK economy expanded 0.4% between April and June, according to the Office for National Statistics.

That compares to 0.2% in the first three months of this year.

It grew by 0.1% between May and June.

View more on twitter

Asian markets close lower on trade worries

Man looks at ASX200 stock market board
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Most of Asia's main stock markets ended the week lower as trade trade and broader geopolitical concerns continue to weigh on investor sentiment.

Japan's Nikkei 225 was the biggest loser with a fall of 1.3% to 22,298.08.

Hong Kong's Hang Seng and Korea's Kospi both shed about 0.9%.

The Shanghai Composite closed flat, albeit in positive territory.

Retailers 'race to pivot' their businesses

Online shopping
Getty Images

Richard Lim, chief executive at Retail Economics says House of Fraser's administration "is a real blow to the high street".

He says: "The combination of rapidly rising costs against a backdrop of seismic shifts in the way we all shop is pushing traditional business models to the brink. The race is on to pivot business structures fast enough to be fit-for-purpose in today’s digital world.

"Of course, individual circumstances need to be accounted for. The demise of House of Fraser in many ways has been the result of poor leadership, paralysis in innovation and crippling levels of debt".

Sterling down 0.45% against the dollar

The pound is now down 0.45% against the dollar at $1.2766.

This could, of course, change when the Office for National Statistics announces UK GDP figures for the second quarter.

We'll get those figures in 10 minutes so stay with us...