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[00:00:02] Now on BBC News. The latest
[00:00:04] business news from across the globe.
[00:00:06] globe. Business Today. Tough choices
[00:00:17] choices UK state pensions are set
[00:00:18] set to rise by nearly £500 a year.
[00:00:21] year. But can the country afford afford the triple lock policy? And
[00:00:25] And the price of debt? The yield
[00:00:26] yield on US Treasury bonds hits its
[00:00:29] its highest level since 2023, with
[00:00:31] with a fed rate rise now looming.
[00:00:35] looming. Hello. Welcome. This is is Business Today I'm Ben Thompson
[00:00:38] Thompson and we start in the UK where where the latest employment data
[00:00:41] data paints a picture of a rather rather tricky jobs market. If you
[00:00:45] you take a look first of all at the the employment numbers, those figures figures show that there's been a
[00:00:49] a slight fall in August. That compares
[00:00:51] compares to the previous month. It
[00:00:55] It represents around 26,000 fewer fewer employees in the workforce. workforce. That drop has been mainly
[00:00:59] mainly in retail and hospitality. hospitality. Well, the quarterly
[00:01:02] quarterly rate of unemployment that that remains unchanged at 4.9% for
[00:01:06] for the three months to July. On On top of that, job vacancies remain
[00:01:10] remain at their lowest level outside outside of the pandemic. But the
[00:01:14] the wage data tells us a different different story. Annual growth in
[00:01:18] in employees average earnings, including
[00:01:19] including bonuses, came in at 3.9%
[00:01:22] 3.9% between May and July. Now it it is unchanged from the previous
[00:01:25] previous period, but the figure is is likely to be a defining factor
[00:01:28] factor in the rise in the state pension
[00:01:31] pension next April under the so-called so-called triple lock guarantee, guarantee, the pension will go up
[00:01:35] up by the highest of either 2.5%
[00:01:38] 2.5% inflation or wage growth. So So it means that state pensions would
[00:01:41] would rise by nearly £500 a year
[00:01:45] year from next April. Labour made made a manifesto pledge at the election
[00:01:48] election to keep the triple lock, lock, but economists have warned
[00:01:51] warned about the cost of the policy policy and that it will mean tough
[00:01:54] tough spending choices in next month's month's budget. So just how sustainable
[00:01:58] sustainable is it? Well, let's talk talk now to Heidi Karjalainen, who's
[00:02:01] who's senior research economist at at the Institute of Fiscal Studies.
[00:02:04] Studies. It's good to have you here. here. And let me start with that
[00:02:07] that question. Is the triple lock
[00:02:10] lock still affordable? Yeah. So basically
[00:02:13] basically the triple lock is really really important because it determines
[00:02:16] determines how we operate the state state pension every year. And we
[00:02:20] we currently spend £154 billion on
[00:02:23] on the state pension each year. And
[00:02:26] And that's basically the equivalent equivalent to the total budgets of
[00:02:30] of the Ministry of Defence and Department Department of Education combined.
[00:02:33] combined. So that's why all these these decisions around how we're
[00:02:36] we're going to increase the state state pension matters so much. Now
[00:02:40] Now the triple lock compared to average average earnings indexation. So that's
[00:02:43] that's kind of the usually what we we consider as the alternative. Actually Actually this year wouldn't have
[00:02:47] have made much of a difference because because we think that the average
[00:02:51] average earnings growth is the highest highest of these three numbers. But
[00:02:54] But looking forward that's where where we really start seeing those
[00:02:57] those big spending pressures. And And the government has talked a lot
[00:03:01] lot about what they call fairness, fairness, making sure that everyone everyone pays their way. We know
[00:03:04] know there are some tough choices choices that the government will
[00:03:07] will have to make, but they are just just that. They are choices. The The government can choose what it
[00:03:11] it does with the money it has and and where it will spend it. But is
[00:03:14] is it fair when it comes to different different generations about who pays
[00:03:17] pays the burden of looking after
[00:03:19] after people in their older age?
[00:03:21] age? Well, yeah, I think that's basically
[00:03:24] basically what a lot of this conversation conversation kind of is about is,
[00:03:27] is, is, is comes to this kind of of generational differences, but
[00:03:30] but really actually how we operate operate the state pension affects,
[00:03:33] affects, you know, public finances finances more generally. And, you
[00:03:37] you know, the challenges are they're they're kind of common across everyone.
[00:03:41] everyone. We need to or there's are are pledges to spend more on defence.
[00:03:45] defence. We there's, we tend to have have higher health care spending,
[00:03:48] spending, social care spending. All All of those pressures apply to everyone
[00:03:51] everyone really. So so that's why why addressing the triple lock isn't
[00:03:55] isn't just about kind of generational
[00:03:59] generational differences, but it's it's really benefits everyone and and the public finances overall in
[00:04:03] in the long run. We know there have
[00:04:04] have been attempts to reform pensions pensions in previous years, some
[00:04:08] some with limited success. And I I wonder whether there needs to now
[00:04:12] now be a bigger conversation, one one that looks at we're all living
[00:04:15] living a bit longer, so the cost cost of that welfare benefit is going
[00:04:18] going up and there's maybe a bit bit of a misconception that a lot
[00:04:21] lot of people feel they have paid paid in during their lifetime and and therefore are entitled to it.
[00:04:25] it. But actually what we're all doing doing is just paying for the next
[00:04:28] next generation, aren't we? Yeah, Yeah, that's absolutely right. And
[00:04:32] And you're exactly right that there's there's this misconception that,
[00:04:35] that, you know, people somehow paid paid their National Insurance contributions contributions into a pot and then
[00:04:39] then they're paid their state pension
[00:04:40] pension from that. But actually current
[00:04:43] current pensioners are being paid paid their state pension from current
[00:04:46] current taxation. So that's why these these challenges of an ageing population,
[00:04:50] population, for example, where we we have fewer working age people people compared to the size of the
[00:04:54] the pensioner population. That's That's why that adds a lot more pressure
[00:04:58] pressure to the system. And I think,
[00:04:59] think, you know, there is an increasing increasing understanding that the
[00:05:03] the way that the triple lock increases increases state pension spending
[00:05:06] spending adds a lot of uncertainty uncertainty and adds a lot of spending.
[00:05:09] spending. And I think people are are starting to well, there's more
[00:05:12] more and more talk about how we might might be better off if we move to
[00:05:16] to a system where we, for example, example, increase the state pension
[00:05:19] pension in line with average earnings earnings and building building in
[00:05:23] in some inflation protection as well. well. Heidi, it's good to get your
[00:05:26] your thoughts on this. I'm sure we'll we'll talk again about it, but for for now, thank you, Heidi Karjalainen
[00:05:29] Karjalainen there, the senior research research economist at the Institute Institute of Fiscal Studies. Thank
[00:05:33] Thank you. Well, those latest employment employment and wage figures will
[00:05:37] will be scrutinised very closely closely by the Bank of England. They They will meet on Thursday. There
[00:05:41] There will also be casting a close close eye on the latest inflation
[00:05:44] inflation numbers that are published published tomorrow morning. Rising
[00:05:47] Rising energy costs caused by the the war in Iran have been pushing pushing up prices right around the
[00:05:51] the world, which in turn is causing causing a sell off in the bond market
[00:05:55] market on Monday. The yield on ten ten year US government bonds briefly
[00:05:59] briefly exceeded 5% for the first
[00:06:02] first time since 2023, hitting thresholds thresholds that will ring alarm bells.
[00:06:05] bells. The rise in yields comes during during a continued sell off in the
[00:06:09] the US Treasury market, which is is estimated to be worth just over
[00:06:13] over $31 trillion in total. That's That's likely to push up mortgage
[00:06:16] mortgage rates in the US and make make borrowing more expensive for
[00:06:19] for businesses. Now, all of this this at a time when the when we are
[00:06:22] are expecting Fed Chair Kevin Warsh Warsh to raise US. Interest rates
[00:06:26] rates this week as prices across across the US continue to rise. Let's
[00:06:29] Let's talk now to Bob Parker, who's
[00:06:31] who's senior adviser at Icma Asset Asset Management and Investors. Bob,
[00:06:35] Bob, good to have you here. Why does
[00:06:37] does this matter? It matters for
[00:06:40] for a variety of reasons. And you
[00:06:43] you know, linking back to your conversation
[00:06:46] conversation earlier about pensions, pensions, let's not forget that in
[00:06:49] in the UK, you know, the cost of
[00:06:52] of interest debt in the gilt market,
[00:06:53] market, the cost to the government government is over £100 billion this
[00:06:57] this year. In you know, the situation
[00:07:00] situation in America is even more
[00:07:02] more worrying where interest costs
[00:07:04] costs are the second largest item
[00:07:06] item in the American budget and will
[00:07:09] will exceed 1 trillion. So the higher
[00:07:11] higher bond yields go and bond yields
[00:07:14] yields are going higher because of of what's going on in. As you mentioned
[00:07:18] mentioned in energy markets. And
[00:07:19] And that feeds into higher inflationary
[00:07:22] inflationary expectations. And central central banks have to respond to
[00:07:26] to that by raising interest rates rates with The Fed probably raising
[00:07:29] raising rates tomorrow. Bank of England England not necessarily raising rates
[00:07:33] rates this week but certainly in
[00:07:36] in October or later in the year.
[00:07:38] year. And the ECB has has raised
[00:07:41] raised rates twice already. So higher
[00:07:44] higher costs for consumers, higher higher costs for businesses. And
[00:07:47] And as bond yields go higher, we
[00:07:50] we have this sort of catch 22 this
[00:07:53] this vicious circle in dealing with
[00:07:55] with budget pressures. Yes. And quite quite clearly that will be thrown
[00:07:58] thrown into focus when we hear the the budget here in the UK. But particularly, particularly, of course, the politics
[00:08:02] politics and the economics will come come crashing together, won't they?
[00:08:05] they? Not least in the US for the the mid-term elections and for President
[00:08:09] President Trump, the cost of borrowing borrowing going the wrong way. Absolutely.
[00:08:13] Absolutely. And you know, the opinion opinion polls for the mid-term elections
[00:08:17] elections are not positive for the
[00:08:19] the Republicans. And, you know, another another factor which I think does
[00:08:22] does worry investors is that if the
[00:08:27] the Republicans lose control of the
[00:08:29] the lower the House, then we could
[00:08:31] could end up with a policy gridlock
[00:08:34] gridlock in America. And, you know,
[00:08:35] know, when that has happened in the
[00:08:38] the past, we have had, you know, know, increased volatility in bond
[00:08:41] bond markets. So it's not just the
[00:08:45] the problem of upward pressure on
[00:08:46] on bond yields. Investors face the
[00:08:49] the challenge of increased volatility, volatility, which in turn means that
[00:08:52] that they adopt much more cautious
[00:08:55] cautious positions in terms of their their asset allocation. Bob, we will
[00:08:58] will talk again about this, but I I know you'll be keeping a close close eye on it as well. Thank you,
[00:09:02] you, Bob Parker. Thank you. A thanks.
[00:09:06] thanks. Europe's biggest names in in transport and energy are joining
[00:09:09] joining forces in a major push to to bring hydrogen powered heavy trucks
[00:09:12] trucks onto the road by 2030. A host
[00:09:14] host of companies, including Volvo Volvo Daimler Truck, Toyota and TotalEnergies
[00:09:18] TotalEnergies say the technology technology is ready, but the ecosystem
[00:09:22] ecosystem around it isn't. Now, for for the first time, they're co-ordinating
[00:09:25] co-ordinating fleets, fuel stations stations and hydrogen supply into
[00:09:28] into a single plan. Full details details of the programme will be
[00:09:31] be announced by the bosses at the the IAA Transportation event that's
[00:09:34] that's getting under way in Hannover
[00:09:37] Hannover as Julia Caesar now reports. reports. Heavy duty transport is
[00:09:40] is one of Europe's biggest remaining remaining sources of emissions. Hydrogen
[00:09:44] Hydrogen has long been seen as a a promising solution for long haul,
[00:09:47] haul, heavy duty transport, but progress
[00:09:50] progress has been slow. Without a
[00:09:53] a co-ordinated ecosystem, Europe
[00:09:56] Europe has about 6.5 million diesel diesel trucks producing a quarter
[00:10:00] quarter of all road transport emissions.
[00:10:02] emissions. Stand by any busy road road like this one and you can feel
[00:10:06] feel the noise and pollution that that they create while switching
[00:10:09] switching heavy trucks to hydrogen
[00:10:12] hydrogen would mean zero tailpipe
[00:10:15] tailpipe emissions, quieter roads roads and cleaner long haul freight
[00:10:19] freight where batteries fall short. short. The initiative aims to make
[00:10:22] make hydrogen trucks commercially commercially viable. That means tackling
[00:10:26] tackling one of the biggest barriers barriers to adoption the total cost
[00:10:29] cost of ownership. During the coming
[00:10:32] coming 5 to 10 years, we. Our anticipation anticipation is that we will start
[00:10:36] start to see the scaling. But again, again, we will only see it if we
[00:10:39] we are working together in the ecosystem. ecosystem. And that's the reason
[00:10:42] reason why a coming together between between different actors in the ecosystem
[00:10:45] ecosystem is so important because because we think that the business
[00:10:49] business case, the technology is is there and now it's about really
[00:10:52] really to make sure that we are putting
[00:10:56] putting also the right conditions conditions to provide business models
[00:10:59] models for scaling. The plan includes
[00:11:02] includes strategically placed refuelling refuelling corridors along key transport
[00:11:06] transport routes designed to give give operators confidence that hydrogen
[00:11:10] hydrogen will be available where where and when they need it. This
[00:11:13] This is a teamwork between private private and public to make it happen.
[00:11:17] happen. But again, we believe and
[00:11:18] and we have seen that also that countries
[00:11:21] countries and regions that are driving
[00:11:23] driving this agenda can combine competitiveness
[00:11:29] competitiveness resilience or energy
[00:11:30] energy resilience. So to speak. Regional
[00:11:34] Regional security and also competitiveness competitiveness and eventually, which
[00:11:38] which is super important decarbonisation, decarbonisation, less pollution and
[00:11:40] and less noise when it comes to mobility.
[00:11:43] mobility. Hydrogen offers fast refuelling, refuelling, high energy density and
[00:11:46] and the ability to keep freight moving moving without adding huge battery
[00:11:50] battery packs. Experts say that shifting
[00:11:54] shifting these trucks to hydrogen hydrogen is essential if Europe's
[00:11:58] Europe's going to meet its climate
[00:12:01] climate targets. Europe's transport transport sector is preparing for
[00:12:04] for a hydrogen powered future and
[00:12:06] and the race to build it has officially
[00:12:09] officially begun. Julia Caesar. BBC
[00:12:12] BBC News. Some of the other business business stories we're following
[00:12:15] following for you and a plan to nationalise nationalise the UK's third largest
[00:12:18] largest steelworks is being developed developed by the government. The The Business Secretary, Jonathan
[00:12:21] Jonathan Reynolds, said ministers ministers were looking to acquire
[00:12:24] acquire Speciality Steel UK that that has sites in South Yorkshire Yorkshire and the West Midlands.
[00:12:28] Midlands. The government initially initially took control of the firm firm last year after it was forced
[00:12:32] forced to liquidate by the High Court. Court. Alcohol buyers in the UK will
[00:12:36] will be able to use a digital ID ID app on their phones to prove their
[00:12:39] their age. Under new rules, pubs pubs and shops in England and Wales
[00:12:42] Wales can use the tech in addition addition to current physical forms
[00:12:45] forms of ID, with the government government saying a digital option
[00:12:47] option will make age checks quicker quicker and more secure for customers
[00:12:51] customers and staff. More on all
[00:12:54] all those stories for you right now. now. Bbc.com/business. But that is
[00:12:58] is your Business Today. See you soon.
[00:13:08] soon. MUSIC
[00:14:22] Martin Sharkey of Tech, now on BBC
[00:14:23] BBC News. The BBC was always on in
[00:14:31] in the Missouri house and my dream dream actually was to be a BBC News
[00:14:34] News presenter. I want to be for
[00:14:37] for others what the BBC was for us
[00:14:39] us a trusted source of stability
[00:14:41] stability and hope. For me, trust
[00:14:44] trust is about presence, about fostering fostering relationships all around
[00:14:47] around the world over years. So when when a story breaks, we're not chasing
[00:14:51] chasing a lead. We're already there.
[00:14:54] there. I'm Maryam Moshiri on the
[00:14:56] the World Today for BBC News.
[00:15:09] Welcome back. You are with BBC
[00:15:10] News. I'm Kasia Madera the rapper
[00:15:14] rapper Macklemore has been dropped
[00:15:15] dropped from Ed Sheeran's US tour
[00:15:18] tour after making pro-Palestinian pro-Palestinian comments on stage. stage. The artist was criticised
[00:15:22] criticised by Jewish groups after
[00:15:24] after saying Free Palestine at two two concerts and making political
[00:15:28] political speeches. Macklemore stood stood by his comments, saying in
[00:15:30] in a statement that the real victims victims are the Palestinian people
[00:15:34] people in Gaza. Writing on Instagram, Instagram, he said anti-Semitism
[00:15:37] anti-Semitism is real and what is is exact and that is exactly why
[00:15:40] why the word matters too much to
[00:15:42] to be used as a shield against criticism
[00:15:46] criticism of the Israeli state when
[00:15:48] when criticising Israel opposing opposing Zionism or saying Free Palestine
[00:15:52] Palestine gets conflated with hatred
[00:15:53] hatred of Jewish people. It doesn't
[00:15:56] doesn't protect Jewish people. It It protects Israel from accountability. accountability. Well,