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In a moment, reaction to the UK's $2 .8bn boost to defence spending and how the markets are feeling about good news on UK inflation alongside a downgraded growth forecast. Also coming up today, House South Korea is responding to the worst wildfires in its history.
If the top level is engaged and involved, a national crisis can be averted.
But if it's a localized small crisis, the emergency response tends not to be so effective.
And changes to liquor licenses in the Indian state of Uttar Pradesh.
People who consume alcohol, they are rejoiced because of this decision, and they are quite happy, because they are queuing up to buy alcohol for as cheap as possible.
First, the UK Chancellor of the Exchequer Rachel Reeves has announced an additional $2 .8 billion in spending for the Ministry of Defence next year, the latest country to ratchet up spending on weapons and defence capabilities.
This was part of her spring statement where the 2025 growth estimate for the UK has been halved from 2 % to 1 % by the official economic forecaster.
Rachel Reeves said the word worldwide, economics, were to blame.
�The global economy has become more uncertain, bringing insecurity at home as trading patterns become more unstable and borrowing costs rise for many major economies.
The job of a responsible government is not simply to watch this change.
This moment demands an active government.� �Like to Amy Stone, Chief Economist for the ADS, the trader body for British Defence companies.
Amy, thank you for being with me on World Business Report.
A lot of focus in the UK media on what you might call the more negative sides of today's announcement, but from the point of view of the UK defence sector I presume good news.
Thank you so much. Yes, of course, great news for us.
It all really welcome policies to help achieve that national security objective alongside economic growth.
And I think some of the additional elements that have been put in are there to ensure that we do achieve economic growth as we support defence spending.
Will it be spent with UK companies because in some countries that's been sort of baked into the the rules of the money if you like.
I think this government has been quite clear that there's a sort of a British first narrative on this and we've seen that where some of the announcements have been this morning for UK manufacturers as well.
But what we've really seen in the statement today is a shift to that capital intensive investment that is needed some pull forward of fitting for equipment for UK British ships for the Royal Navy.
What we think is particularly exciting is that 10 % ring fence at least for defence innovation which should by all means be happening here in the UK.
Yes I was going to ask you about that, they've talked about new technologies including drones and other AI enabled tech. Tell us a bit more about what that looks like.
It's a really important part of where the uncrewed vehicles are heading in terms of the defence.
I think the changes to procurement are going to be particularly important to help elevate that and help escalate it, really about getting those new innovative technologies to sort of frontline command, and help them do their jobs as best they can.
Okay and to build all of this stuff your members need supply chains global supply chains in some cases to buy chips to buy steel how is all that at the moment because we're hearing about tariffs from all sorts of countries on these kinds of goods?
Of course, and the tariff question is one that we think about daily here, as you will understand, and I think the geopolitical situation is changing on somewhat an hourly basis at this point, maybe more frequently.
But all we do know is that the defence industry and the aerospace industry, all of the sectors that we work in, are really committed to making sure that we are protecting our national security first and making sure that we're using those solid supply chains and approved routes as as well as growing that economic capability.
So we're looking forward to the defence industrial strategy to come out and for the spending review as well, to sort of know what is the UK really going to be making for itself?
What do we need to rely on purchasing from our allies and other allied nations?
And likewise, where do we need to collaborate more?
So we've got a little bit of waiting time here I think until some of that becomes more clear.
And I think, as you say, the geopolitical context is sort of shifting alongside that, but hopefully more will become clear in the summer on a few few of those points.
We're obviously seeing increased defence spending by many countries although the EU defence spending is restricted to contractors who are from the European Union so I was just wondering whether the global market in the kind of things you provide is making a difference or or not?
I'd say absolutely so a lot of the defense companies that are based here in the UK have European origin and a lot of European defense companies have UK headquarters as well and we're really proud that they're part of our membership too so it is definitely making a difference and as you've mentioned the supply chains that that's still an ally for us.
That's all quite important so it's where this head's next and our members are clear that we would still like to see a UK and EU defense and security pact come through at some point.
I think it's still in the works that is very much working together on a lot of this at this stage as well.
Thank you very much indeed for being with me Amy appreciate it.
That's Amy Stone from ADS which is the trade body for British defence companies.
Let's bring on Danny Hewson now for a little bit more on the UK Chancellor's announcement in the House of Commons in London a couple of hours ago.
This came in the context of some pretty good news for her about UK inflation, Danny.
It did indeed yes, we had inflation numbers out this morning and CPI actually fell from 3 % in January to 2 .8 % in February.
Now before we get excited about that I think it's really important that we say that inflation is expected to rise again in the UK.
There's a lot of bill increases heading the way of households in April in particular and changes, also, to national insurance for companies.
But, yes, certainly for the Chancellor if she wanted some kind of positive news before she stepped up today, she'd got it.
Now, inflation's been a problem in some countries, including the UK and although it's come down, it's still stubbornly sitting above target.
Why? It's stubbornly sitting above target because there are all sorts of issues which are still impacting the global picture.
When you think about what is going on over in the United States with concern about tariffs, that has really impacted how businesses have been spending and planning over the last few months.
Also, energy costs are still high, there's still an awful lot of geopolitical uncertainty and all of those things are filtering through to inflation, which is meaning that for a lot of people they're still finding that their cost of living isn't where it was before we started to see these levels elevate.
No great surprise that the growth forecast was cut.
Everyone was expecting that.
Bongials are up I see.
Anything else on the markets?
Markets have been pretty flat.
London markets the FTSE 100 and the more domestically focused FTSE 250 did take a bit of a wobble when the Chancellor was on her feet but have recovered and are in the green.
As you would expect, a lot of consumer -focused stock is up because of that inflation reading that we got earlier.
We've got defence stocks up as well after the announcement by the Chancellor that you have just been talking about.
A lot of it, of course, is linked to the fact that with inflation coming in lower than had been expected, just maybe the Bank of England might see its way to cutting interest rates in May.
Market expectation has jumped up to just over 50 % in the last few hours.
Terrible for business confidence, though the whole business of the growth forecast being cut or at least seeing that confirmed.
Yeah, I think most people had expected that it would be confirmed because the Bank of England has already given its stamp of what it expects the economy to do.
And in fact, a lot of people will be looking at this downgrade by the Office for Budget responsibility – the spending watchdog – and saying actually, maybe it's a little optimistic.
The bank forecasting 0 .75%, the OBR forecasting 1%.
And of course, there are caveats in amongst all of that as well, because it does say if a global trade dispute's escalate to include that 20 % point rises in tariffs that Trump has spoken about, which could come in this time next week, then this could reduce UK GDP by that 1 percent.
Danny, stay with me.
Danny Houston from AJ Bell is here now.
The global economics we've been talking about being exacerbated in many corners of the world by President Trump's trade tariffs.
Could they provide unexpected opportunity, though?
In Chile, it is the second biggest producer and exporter of farm salmon in the world behind Norway.
Jane Chambers has been finding out more.
The salmon farming industry has transformed southern Chile, providing jobs for around 86 ,000 people, indirectly and directly.
This is Multi -Xíís processing plant, in the coastal town of Puertomont, 11 hours drive down south from Chileís capital, Santiago.
They process fresh and smoked salmon. My name is Javier Soto, I am the manager of the Smoke and Plant.
Piles of salt in front of us, the salt from the Atacama desert.
This is our recipe we use.
This is salty, combined with brown sugar.
It depends on the recipe or what market we are selling the products.
We use a different amount of salt and sugar.
This factory can produce 300 tonnes of final product per month.
The largest export markets are the United States and Japan.
We have 6 smokers for doing the recipes.
the recipes can have 30 minutes or until six hours, it depends what market you are saying.
For example, in Japan they love the smell of the smoke.
In the case of the US they prefer more the salty and so they started the recipe.
Now, the threat of 25 % tariffs on Canadian salmon exports to the US and trade tensions between the US and Europe could help boost the already strong US market for Chilean businesses.
Around half of U .S. salmon imports came from Chile in 2022.
Chile has a free trade agreement with the United States so in theory there's no tariffs.
MacRays is the founder of Spheric Research, an independent research house which specialises in global seafood markets.
Canada has been historically the smaller but still quite significant seller of salmon to the U .S. market, but there's a deep concern than among the Canadian sellers, they've lost the U .S. market or they become less competitive in that U .S. market.
But Chile may need more than just week of competition.
Arturo Clement, president at trade body Salmon Chile says the industry needs more support to encourage investment.
Well, for us it has been very difficult to grow because we have too many regulations, So what we need is we need to define a long -term strategy regarding salmon farming.
Artora is referring to unresolved issues about where the industry is allowed to farm, and a planned new agriculture law, which he thinks will be restrictive.
There are also concerns over the use of antibiotics to tackle a bacterial disease.
The industry stresses antibiotics are used within the law and there's no trace of them when the fish are exported.
Back at Javier Soto's smoking plant, his colleague Armando Baudon says they have the capacity to meet more demand.
Today there are around 480 people working here and when we are at our busiest time we can have more than 900 people working here.
There could be an opportunity for Chile's salmon industry with the current global trade tensions but it faces its own challenges.
Now, if you'd like to hear more about that just search for Business Daily wherever you get your BBC podcasts.
This is World Business Report with Andrew Peach here on the BBC World Service.
At least 24 people have been killed in the deadliest forest fires in South Korean history.
Tens of thousands of people have been evacuated.
The fires are spreading rapidly because of strong winds and very dry conditions.
South Korea's acting President, Han -duk Soo, said power and communication lines are down and roads have been blocked.
The government prioritises wildfire suppression above all levels, and will mobilize all available personnel and equipment to break the chain of wildfire spread.
Furthermore, to ensure swift recovery of those affected by the fire, we will spare no efforts in providing emergency relief as well as administrative and financial support.
Well, to get a sense of what's at stake for East Asia's fourth largest economy, I've Talking to Andrew Sanon, who's in Seoul for The Washington Post. We're in early spring here and it's extraordinarily dry.
Very, very warm. We had a blizzard last week, now people are wearing T -shirts.
And yesterday driving through the countryside, my car was almost being buffeted by this very, very warm, dry winds.
And I was seeing things I've never seen in Korea before.
By the side of the road in sort of the dry paddy fields in patches of empty land.
There were literally dust devils, the kind of thing you'd expect to see in the Middle East being blasted up by this very, very hot, very, very dry wind, almost eerie, and as I said, very strange conditions for South Korea, but clearly this is what's driving the extraordinary emergency which we're witnessing in the South East. And because it's so unusual, people wouldn't have been prepared for it.
Was it forecast? Wildfires do occur in the forested hills and mountains of Korea.
They're not unusual.
What's unusual here is the death toll.
These are the deadliest wildfires to the best of my knowledge in modern Korean history.
So the other thing which is extraordinary is that these are now threatening.
They've already devoured one and threatening another site of national cultural heritage.
And this is really spoop people.
As I'm sure you're aware right now here in Korea, that the public has been absolutely transfixed by the political situation.
A martial law declaration, the impeachment of a president.
And any day now we're expecting some decision from the constitutional court on whether this impeachment will be overturned or will be sustained.
So there's a major political issue underway, but in the last two, perhaps three days the The national attention has shifted to this unfolding crisis in the South East. Do you get the sense that the fact that the politics is in chaos is in any way hampering the country's response?
That's a very good question.
I mean, generally speaking, Korea is very, very good at top -down management.
If you look at the really good crisis management in this country in modern history, you would be looking at the 1997 -1998 economic crisis which was brilliantly handled and swiftly turned round.
You'd be looking at the COVID pandemic, which I think Korea did better than probably any other prosperous democracy.
No lockdowns, regional or national, very, very low death rates.
At the lower level, Korea's not so good at responding.
You may remember the Itaewon crowd control tragedy on Halloween a couple of years ago, in which again over a hundred people were killed in the crowd crush because the police hadn't deployed to this location, so the paradigm in Korea is if the top level elite is engaged and involved, a national crisis can be averted, but if it's a localized small crisis, the emergency response tends not to be so effective.
Andrew Samman from the Washington Post with me from Seoul, next to India.
This is the sound of long queues of people gathering outside liquor stores in the state of Uttar Pradesh.
Why? Well I've been finding out by talking to my colleagues Samadha Pal in New Delhi, who told me they'd been attracted by two -for -one deals, that kind of thing, because vendors have to offload all their stock in the next few days.
It is primarily to also sell off the remaining stocks before the financial year ends, so that any unsold liquor, if it exists, it is not seized by excise officials and to avoid these losses the vendors are offering various discounts and deals such as buying one bottle and getting another bottle free and a lot of price reductions are also happening.
It is being triggered by a policy change, which is that in the last six years, licenses for alcohol were renewed through the vendors very easily.
But this year, the state government has introduced something new they're doing an online lottery system to allocate those liquor vendors.
And as a result of these changes, as I understand it, you're going to end up with people who been running liquor stalls for many years, suddenly unable to carry on.
Yes, there is a bit of a fear among the vendors, there are concerns among vendors that it's not so much that they'd not be able to continue the business, but it also pertains to the stocks that they have, that they'd not be able to sell those stocks post the 31st of March. And they will have to then destroy the remaining stocks if the government does not take it back.
So that is a major concern among traders and among vendors.
This has fueled these kinds of exciting discounts and long queues that we're seeing in several cities.
In addition to this the liquor association has also filed a petition against the government.
They were demanding that the government take back the remaining stock of alcohol.
And however, the government has not issued any direction on it yet, which is why the vendors are also trying to sell their stocks and make a quick buck before the new policy kicks in.
In most parts of the world, if you were suddenly doing a buy one, get one free deal on alcohol, you'd certainly have big queues of people trying to buy it.
It sounds like India's no different.
Absolutely. Big postures have been put out, a lot of exciting offers.
It is looking like absolute chaos, but a lot of people who consume alcohol, they're rejoiced because of this decision and they're quite happy because they're queuing up to buy alcohol for as cheap as possible.
So it is quite exciting for those.
There are fewer people at ration shops and more people at the liquor stores today.
Are people stocking up, are they selling it on, or are they just enjoying it now?
I think they're just stocking up right now because the traders have also urged the government to allow them to sell off their current stocks, because there are huge losses if they continue to sell this alcohol and potential legal issues if they sell after the licenses expire.
So it primarily has to do with a lot of stocking up for consumers.
Sam either Powell with me from New Delhi let's check in now on the battle between the music industry and AI developers US judges have blocked universal and their request to stop the AI company anthropic from using their song lyrics to train it's AI model Tom Grey is chair of the Ivers Academy the British Academy of songwriters composers and authors for a member of the award -winning group Gomes Tom thank you for being with us on World Business Report what's the issue here What are the music companies upset about?
Well, you know, if you use any copyright, any lyric, any song, any recording, someone should pay for that use.
I mean, that's really what copyright is there for.
It's the guardrails that allows people to, sort of, charge for their intellectual property.
And with that intellectual property, all the people who make stuff in the world have no way of making money.
So it's really quite challenging, a situation where companies are trying to make technology to effectively replace human creativity and using human creativity to do it and trying not to pay for that.
I guess, although musicians build on each other's work all the time, don't they?
I was listening to a discussion this morning between Will .i .am and Niall Rogers, who were talking about all the previous musicians whose work they'd built on and stolen to an extent.
so why is this different?
It's different because we build on each other's work in order to drive our craft forward in order to make better work.
We're not trying to make a piece of technology in order to end the craft altogether.
This is really the challenge that we're facing.
We love to share together.
We love to lend each other help and work together on each other's projects.
And it's one of the most collaborative industries I can think of.
But really, we're dealing with tech companies who are building these models very quickly.
They spent an awful lot of money on models.
They're trying to monetize them because they spent so much money on them.
And one of them, it's just low -hanging fruit to come after music and creativity because it's so easy to make it.
And that's really what we're dealing with here.
We're dealing with basically wealthy tech companies who are trying to make more wealth from the work of others.
And especially from a group of people who, let's be clear, we're talking about Beyoncé, we're talking about Nile Rodgers and whoever.
But the vast majority of musicians are very poorly paid.
There's about 150 ,000 in the UK and in the census.
The average income is somewhere below £20 ,000 a year.
So we're talking about a group of people who really don't need to be ripped off.
I don't suppose the AI companies, rich as they may be, would be thinking they're setting out to end the craft though, would they?
Do you think there's any place at all for artificial intelligence in music?
And it seems hard to sort of say, well, we're going to use it in every area of life, but of course not in this one.
If you use music without paying for it, then you demonetise the craft, right?
So in the first instance, what you're doing is saying we're not going to pay for music.
Now if we live in a world where no one pays for music, then no one can make a living from music so you do end the profession in real time in that sense and then if you make a piece of technology which, which you know, is in there in all, for all intents and purposes to say to people, well, it's really easy to write songs, you look at this, computer can do it in five minutes even though what has actually happened is a billion dollar, um, you know, model has been built over many years by scraping the work of other people.
You know, it's, it's, it's, I don't know, I feel like it's existential for the craft itself?
I think you know, we don't need to have people replaced.
We don't need one of the most joyful, beautiful art forms in the world to be done by computers in a matter of seconds.
Why do we need that?
I mean, I'd ask you why you think the world needs it?
Oh, gosh, I don't know.
I don't tell you the view that it does at all.
Tom, thank you so much!
I'm gonna have to leave it there.
Unfortunately, Tom Grey, thank you very much. Thank you so much. Tom Gray from the Ivors Academy.
You talk about scraping property.
I'm just seeing if I can remember Niall Rodgers and William where talking about scraping U2 talking heads earth winded fire, cool and the gang, the list went on.
Universal by the way so they're confident in their case against Anthropic and it remains vital to protecting creators from the wholesale theft of their copyrighted works by Anthropic and other AI companies.
Danny Houston from ajaybell is still with me.
Let's look at one or two other stories today Danny if we can.
GameStop, first of all?
What is GameStop? And why are we talking about it today?
Yeah, GameStop is really interesting because it was one of the meme stocks that everyone was talking about back in 2021.
It is a video game retailer that has really not been doing great guns at all.
And in fact it's about to close about a quarter of its location, shuttering about a thousand stores, but shares were up significantly overnight after it announced it was going to invest in Bitcoin.
So rather than being a video game developer it is now looking at crypto because obviously of changes with Donald Trump wanting to make it easier to invest in those kinds of cryptocurrencies in the United States.
Finally, Porsche obviously big shareholder in Volkswagen losing money.
Yeah, losing 20 billion euros had to write down quite a substantial chunk of the book value of those two businesses.
Clearly things have been very difficult.
It's looking at massive cost -cutting there.
But what's really interesting is it is now planning to invest in defence, about £2 billion it says, that it has to put into future investments in that area.
Interesting. And we end the programme with defence where we started.
Thank you very much Danny Houston, Head of Financial Analysis at AJ Bell.
More online, bbc .com slash news from me, Andrew Peech, and the World Business Report Team.
Thank you for being with us.
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