ECB hikes rates to 2.5%

0:00This BBC podcast is supported by ads outside the UK. September's always busy. Whole Foods Market can help. Their September stock up event makes it easy to load your pantry and freezer with flavorful nourishing food. Even better, there are hundreds of sales. Get dinner going with canned soups and veggies. Lean on frozen pizzas, pastas and seafood. Everyone loves their build your own family meals feeds for for just $35. Stock up at Whole Foods Market. Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments. Capitalize on around the clock access to highly liquid global futures and options markets across all major asset classes. Visit your online broker and get started. See what adding futures can do for you at CME Group.com forward slash podcast. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation or offer to buy, sell or attain any specific investment or service.

1:05Europe's central bank raises interest rates as inflation keeps climbing. It's well business expressed from the BBC World Service. I'm Luke Wilson. Oil hits $105 a barrel with jet fuel costs in some parts of the world pushed even higher and the Chinese telecoms giant Huawei goes on trial in New York. The European Central Bank has increased interest rates to 2.5%. The second time it's raised rates this year and says inflation is set to remain well above its 2% target for an extended period. Christine Lagarde is the bank's president. The outlook remains highly uncertain with risks to the upside for inflation and to the downside for economic growth. Catherine Nice is Depesy Head of Global Economics at P. Jim Credits, one of the world's largest bond managers and she says we can expect similar messages from other central bankers. I think President Lagarde was quite open about where next

2:11for interest rates. She sounded very much concerned about upside risks to inflation, but having said that, she didn't sort of double down on what I would call a very hawkish message. And the second thing is that the ECB now really see greater resilience in the Euro-area economy, not just over the recent past, but also as an expectation going forward. And that's quite important because that would suggest that perhaps the Euro-area economy can actually tolerate somewhat higher interest rates. And do you think we'll see other central banks follow suit? I do expect that we will hear more robust messaging from the other central banks that we get next week. That is the Bank of England. We're already getting hints of that from comments that we've

3:11heard from Governor Bailey at the Bank of England. And of course, one would expect the US Federal Reserve to give a similar kind of messaging. Tom Clary owns several bars and hotels in Dublin, including the city's famous Temple Bar. Inflation in Ireland is currently 3.7 percent. And Tom told me he's definitely feeling the effects. Well, the problem then is it knocks on to everything. Like, rent goes up from my staff. I employ nearly 200 staff. So they all have rent problems, which means they need more wages. And I have to pay them more wages. I have to try and recover that somewhere. And I can either try and recover that with higher prices, which doesn't always work. Or in other ways, you know, cut service and cut standards, which is not good in long term for business like mine either. If you cut as standards and service in a high-end restaurant, you'll end up with no customers after a while because they want the high-end food and service. But that comes out of cost. And interest rates going up hopefully will bring down inflation, but it could also slow down the economy. Do you worry about that as a hospitality business?

4:13Well, I do. Yeah, I don't like my interest rates because it has such a knock on effect of everybody. People's mortgages, business people like myself, when mortgages go up, rents go up. That's a huge consideration. I like my business in the city center and rents in the city center because there's so many hotels in Airbnb apartments now. It's very hard to find even at a high price. And what are the drivers of inflation? The European Central Bank is talking about is energy costs, really high energy inflation? Are you seeing that with your business, Tom? Yeah, we are. Yeah. Our trade association, which represents bars and hotels throughout Dublin, is fighting that hard and we're trying to kind of be a collective and trying to negotiate a reduction for everybody with that, which works with some of them, but doesn't work with everybody. Tom, clearly there. Nicholas Hyatt is lead alternatives analyst at Hargreaves Landsdown. And Nicholas Catherine mentioned about the Fed meeting next week. We'll get US consumer price inflation tomorrow, but we've had producer prices this afternoon. What does it tell us? The producer prices came in a little bit higher than expected at 5.4%. But that's actually quite a

5:18lot month for a month. And that's mostly down to higher energy prices. Now central banks generally try and look through things like higher energy prices because they can spike up one month and fall away the next. But if, as we've been hearing, energy prices stay higher for longer, then that inflation starts to feed through to other parts of the economy. And then central banks do have to take notice. I don't think it changes the Fed's decision next week, but it's definitely something they'll be watching. Nicholas Hyatt from Hargreaves Landsdown. Thank you. A former senior executive at the commodity trading giant Glencore has pleaded not guilty to two bribery charges relating to the company's operations in West Africa. Prosecutors Alex Beard, Glencore's former head of oil was involved in a conspiracy to bribe government or state-owned oil company officials in Nigeria and Cameroon over a decade ago. He denied the charges at a court in London on Thursday, in total six former Glencore employees are due to stand trial. The boss of the world's largest provider of aircraftly sing along with crew maintenance and

6:21insurance has told World Business Express that airlines in emerging markets are in a very bad situation because of rising fuel prices. Brent Crude Oil is now trading at $105 of barrel, but Gediminas Zemeleus, executive chairman of the Avia Solutions Group, says it's driving jet fuel even higher. And he told me while Europe isn't currently affected, it will be next year. Well, it's the biggest part of the each schedule and chartle early in costs. So definitely fuel prices drives potential price increase. In Europe, it's less impact because 90% of the schedule carriers usually hedging fuel and the hedge was around $750 per metric ton in January. And 90% of the carriers has this hedge. But when it comes to the emerging market, Asia Pacific, Latin America, Africa continent, we have a very bad situation. We can find that, for example, in Indonesia or Thailand or Vietnam, jet A1 fuel can cost $1,800 or even $2,200 per

7:28metric ton. Do you think it might be next year where Europe sees more of the knock on effect of the war in the Middle East? We should emphasize that Laucos carriers biggest part of this of the cost is fuel because we spend in glass on any other cost line and hedge usually works one financial year. So if the company's hedge fuel for around $750 per metric ton at the January 2026, January 2027, it will be new game. Definitely will be higher. And bearing in mind at Laucos carriers spending up to 50% of their costs for fuel is definitely will impact the ticket prices and definitely ticket prices impact overall demand. Get a mean as ZMLS of the AVIA Solutions Group. The Chinese tech giant Huawei has gone on trial in New York, facing charges including money laundering and racketeering that were filed more than eight years ago. The US Justice Department alleges Huawei violated US trade sanctions and stole intellectual property from American tech companies. Our business reporter,

8:30Yijoma Induque says it's a pretty significant trial. Huawei has pleaded not guilty to charges, and its defense is arguing that its success is due to things like competition and innovation and just ordinary business dealing. So the company is arguing that its earned its success and this label as a criminal enterprise is unfair. The case is likely to to heighten tensions between Washington and Beijing, which is why it's being very closely watched because Huawei is China's largest smartphone vendor and it's considered somewhat of a crown jewel in China's tech industry. Yijoma Induque. It's been confirmed that Xi Jinping will visit Delhi this weekend to attend the annual summit of the BRICS group of nations. Ties between India and China have improved since a deadly border clash in 2020 with flights, visas and high-level contacts gradually being restored. And finally, Europe's first fully driverless robo-taxes have started being tested in Croatia.

9:31Invited passengers can take test rides along a 22-kilometer route in Zagreb linking the headquarters of the operator Vern and one of the city's main business districts. It's expected to be expanded in the coming months with the aim of covering the whole Croatian capital. That's it from well business express. Please subscribe to get the latest episodes. I'm Luke Wilson. Thanks very much for listening. Balance your trading strategy by adding futures. CME Group helps you manage risk and capture opportunities in all market environments. Capitalize on around the clock access to highly liquid global futures and options markets across all major asset classes. Visit your online broker and get started. See what adding futures can do for you at CME Group.com forward slash podcast. Derivatives are not suitable for all investors and involve the risk of losing more than the amount originally deposited and any profit you might have made. This is not a recommendation

10:31or offer to buy, sell or retain any specific investment or service. Self-directed investing, trading, full service wealth management, automated investing, financial planning, thematic investing, retirement planning, few, and to think. That's just a small taste of what Schwab offers. Because Schwab knows that when it comes to your finances, choice matters. No matter your goals, investing style, life stage or experience, Schwab has everything you need all in one place so you can invest your way. Visit Schwab.com to learn more.