This BBC podcast is supported by the UK.
Over the past 25 years technology has transformed our world in amazing ways.
We've gone from dial-up modems to 5G connectivity. and bulky PC towers to AI-powered microchips.
Every day innovators are redefining what's possible.
Through it all, Invesco QQQ ETF has connected investors to the forefront of innovation.
Access the future today with Invesco QQQ.
Let's rethink possibility. The more diversified investments.
Before investing, consider the fund's investment objectives, risks, charges and expenses.
Visit Invesco.com for prospectus containing this information.
Read it carefully before investing. Invesco Distributors, Inc.
You ever feel that deep pull to the land, to know it, to build something that lasts that itch for your own wild country.
What ain't just a daydream? In 2025, it matters more than ever.
Whether you're a lifelong hunter or just starting out, dreaming of land to explore, to leave something real, or there is a trailhead where you can start.
It's called land.com. the biggest online network for rural property.
Find the right agent. And explore everything from timber tracks to ranches.
Get the tools you need to buy that dream generational tool. property stop dreaming about it and head to land.com it's your place to find your open space Hello and welcome to World Business Report from the BBC World Service.
I'm Roger Hearing, and on this edition, inflation in the US doesn't seem to be rising by as much as feared, at least not yet.
In Cuba, the partial dollarization of the economy sends their own peso currency tumbling.
Also, how North Korean workers in Russia are being exploited and why horror movies are thriving at the box office. as a diversion, horror, it's escapism.
It's oftentimes so outlandish that you can sit back and think i'm going to forget about what's going on the news and just enjoy myself But first, after all the warnings that the US might see inflation rising as a result of Donald Trump's tariffs policies...
The latest Consumer Prices Index figure just out suggests prices rose just 2.7%. in the year to July.
It seems to reflect a drop in petrol prices and no increase in food costs.
But what's called core inflation, which excludes those items, saw prices rise by the most since January.
Despite this, the president posted on social media tariffs have not caused inflation or any other problems for country.
A point amplified by the White House Press Secretary, Carrie Lyne-Livet, who was speaking early today. we continue to see positive economic reports across the board.
Today's CPI report revealed that inflation beat market expectations once again and inflation remains stable.
Overall, inflation has run at a 1.9 average annual pace In President Trump's first six months in office, prices for everyday goods continue to decline.
Caroline Levitt there. Well, I asked our North America business correspondent, Erin Delmore, if that was the right interpretation of the numbers.
There's a lot to like about the inflation numbers today. and asking him how long will it take to see the impact of President Trump's tariffs work their way through to the economic data?
When will we start to see the effects in numbers like what we got today, the CPI, Consumer Price Index? and he said it would be about two to five months.
You know, it takes some time to work through supply chains, and businesses have been absorbing costs consumers are going to start to pick up more of them, according to researchers at Goldman Sachs.
And so this is really a fluid process. Here's the thing about the numbers.
The headline number, which is the big number that includes everything, did look better.
It beat expectations. You know, prices are rising.
So when we talk about inflation, we talk about the rate of inflation.
Is it rising faster or slower than it did last month or last year? or than economists expected.
And in this case, that rate was a bit lower than expected.
That's great news. But when we look at core inflation and that strips out volatile food and energy prices, that number was just a tick quicker. the rate of inflation than what was expected.
That's less positive news. So a little bit of a mixed bag once you dig under the hood.
But clearly the Trump administration is certainly seeing the upside rather than anything else.
I mean, Donald Trump himself posting something very positive...
But in the end, it's to do with pressure on the Fed, I guess, because at their next meeting, are they going to cut interest rates? and they're under a lot of pressure.
They are, and you're asking the right question here.
Let's put it this way. Investors seem to think that this new inflation report is good for the idea that the Fed will cut interest rates at its September meeting.
And I say that Because we saw markets up today, we saw the S&P actually close at a record high today So obviously investors are liking what they're seeing and hearing.
Now, look, For his part, Fed Chair Jerome Powell always says that the Fed is data dependent, that they look at the numbers when they determine what moves to make whether and when to cut interest rates.
And this is certainly one of the numbers that the Fed looks at We get another one of those numbers later in the week.
That's called the producer price index. But, you know, the pressure from the White House certainly isn't ramping down.
If anything, it's ramping up a bit with this new info.
President Trump is no stranger to putting pressure on Jerome Powell, calling him names, criticizing him.
It took a little bit of a different flavor today with President Trump writing on social media that he's considering allowing a lawsuit against Powell to proceed. he says, because of the costs of renovations to the headquarters of the Fed building.
That is the very latest in this ongoing saga between these two men in Washington, President Trump taking aim at Jerome Powell.
But, Erin, at the same time, we do also see, in terms of the tariffs and tariff effects, one of the major ones, of course, which is of greatest concern perhaps to investors... is what's going to happen with China.
And we know that's all been put off now again to November.
Maybe there are reasons for the markets to be reasonably optimistic about the situation.
Exactly. Exactly, Roger. That is definitely something that is on investors' minds today.
A nice carryover from Monday for them. You know, we see a couple different things happening at once.
One is that we do see another 90 day pause put in place.
And that works. We always say, and you and I talk about this, that markets don't like uncertainty.
That's true. Markets will settle for a pause.
They'll settle for a little three-month detente.
We're also seeing a little bit of movement on export controls. whether the U.S. will send some chips over to China that are used for, let's say, AI applications, artificial intelligence applications.
We're seeing some reluctance from China there And it's a good reminder here that this isn't just about trade between the two countries.
There's actually a lot wrapped up in this, not least of all, also rare earth metals and things of that kind of importance.
So look, it's a huge thing on investors' minds.
But between that and the inflation data, they have a lot of reason to feel buoyant today.
And it's showing in the market close. Erin Delmore there in New York.
Well, if the tariffs have not as yet... led to increases in prices for US consumers, have they had a big impact on businesses? that import their products or materials?
Well, they have. One is Carvu. an outdoor apparel and clothing company based in Seattle.
It's owner and founder Barry Barr joins us now.
So, Barry, welcome to the programme. Just first of all, tell us, just what does your business do?
Where do you get stuff? What do you sell?
Yeah, hi there. Thanks for having me. Yeah, we make outdoor apparel, hats, accessories.
Started 32 years ago in the United States, and we still make stuff in the United States, which is interesting.
We're definitely seeing some tariffs. increases on our products coming in, which is going to make prices go higher.
Yeah, I mean, take me through that. What's the kind of stuff you import then?
Is it the things you then make the stuff with in the U.S.?
How does it work? No, well, so when I started, I started with hats and some clothing and I still make that original stuff here.
So I'm in a different part. have some US stuff and we import and design stuff that we can't make in the United States.
More, you know, design centric stuff in Vietnam, India and China.
So we're pretty spread out and all those Countries have been hit really hard with this new American great tariffs.
And that of course is hitting your bottom line, I'm guessing.
Give me a sense of how that's working. Well, example, I mean, like you said right before, the tariffs. most everyone absorbed it for this fall season.
And on supply chain, we're about eight months out.
But the prices are going to definitely have to go up 30% to – pay for these extra duties.
Example, on a shirt from China, or let's say India now, with the $20 shirt, it's 19% duty.
It's, you know, now with 55% duty at 74, that's $14 and 90 cents on top.
Nope. company can absorb that. So obviously the people that are going to get hurt are the American consumers. and potentially the price will be too high for anyone to even buy it.
Well, I was going to ask specifically about that, Barry, because you saw 30% up, you say.
I mean, are people going to buy what you are selling at that price?
That's the scary thing. That's what everyone, and I'm not alone in this. every industry.
I mean, it's not apparel. I mean, it's lighting, it's plumbing supplies.
So, you know, at least I have some pain out there when I talk to other people, but it's going to be interesting on what companies can afford in their bottom line to even stay around to make profit.
But right now, definitely all our profit and working capital is going to pay these extra tariffs.
Barry, we know that the tariffs that have been announced in various forms aren't necessarily fixed.
I mean, we know with regard to China. A lot of them have now been kicked off till November.
I mean, given the uncertainty there, you don't even know, I guess, what you're going to have to charge.
No, it is so much just capacity of everyone in the company trying to get your head around it.
When there is an announcement, it's so hard to understand it.
And even our freight forwarders can't get it.
So nobody knows. And that type of chaos is what is just killing innovation and stress for everyone in the entire country.
Well Barry, I'm going to have to ask you the difficult question.
Are you going to be able to ride this out?
You bet. We've been around 32 years. We're a strong company.
I've run this company clean. We are going to fight because that's what we do.
And no, we're not alone. And, yep, we're just heads down and trying to navigate it because we don't really have another choice.
Barry, thank you so much for being with us.
Barry Barr there of Carvu in Seattle. Well, let's now talk to...
George Conboy, chairman of Brighton Securities, based in Rochester, out of New York.
George, it's interesting to hear the kind of...
And feeling there from Barry, at least, that, OK, maybe inflation's not hit now, but it is there and it's coming and it's going to make life very difficult.
And yet the markets seem to think that this inflation figure, this latest one, is something really to celebrate.
They finished at record highs. Right, right.
Well, the inflation number that came out is a little better than expected and gives investors some optimism.
Now, certainly what Barry says is there are some possible clouds on the horizon.
But investors don't seem inclined to get too worried about that. let's not forget that while the tariff and inflation news is very important for investors, the real core driver of stock prices in the long run, corporate earnings.
And those have been coming in consistently good this quarter.
Yeah, that's been interesting, isn't it?
I mean, what does that suggest? That the American consumer is reasonably happy?
The consumer is happy, and economies, Roger, are dynamic.
As Barry suggests, some importers, some manufacturers – will absorb part of the tariff costs.
Others will try to pass it on. But it's not simply a case of I got to pay 10% more.
I'm going to charge 10% more. Every business will very carefully look at their product line, at what they're doing, and adjust appropriately, and consumers will do the same.
So dynamic is really what happens in our economy, and that's one of the reasons why It is such an attractive thing for investors around the world. our focus to troubles in other economies, and I'm thinking of China.
Evergrande now that's a name massive in real estate of course in China for a long time and it's had a massive decline and I think the The point's now reached where it's been delisted in Hong Kong.
I mean, what does that tell us about that sector of the Chinese economy?
I was surprised to hear that they hadn't changed the name to Nevergrande.
But the real problem, I think, Roger, is the fundamental.
What's the word I'm looking for? The fundamental issues in the Chinese banking system, the loans that have been made.
To make these kinds of developments, I'm more concerned about more bad loans in Chinese banking than I am about Evergrande specifically.
That's a symptom, certainly, of a sick banking system But boy, if we see more of these kind of loans go bad, you can't simply lend money without regard to getting it paid back or your banking system will collapse.
Yeah, fundamental, isn't it? George, thank you so much for being with us.
George Convoy there of Brighton Securities.
You ever feel that deep pull to the land to know it, to build something that lasts, that itch for your own wild country?
What ain't just a daydream in 2025, it matters more than ever, whether you're a lifelong hunter or just starting out.
Dreaming of land to explore, to leave something real, or there is a trailhead where you can start.
It's called land.com. the biggest online network for rural property.
Find the right agent. And explore everything from timber tracks to ranches.
Get the tools you need to buy that dream generational property.
Stop dreaming about it and head to land.com.
It's your place to find your open space.
Let's be real. Life happens. Kids spill. pets shed and accidents are inevitable.
Find a sofa that can keep up at washablesofas.com.
Starting at just $699, our sofas are fully machine washable inside and out, so you can say goodbye to stains anytime.
And hello to worry-free living. Made with liquid and stain-resistant fabrics.
They're kid-proof, pet friendly, and built for everyday life.
We'll be right back. Need flexibility? Our modular design lets you rearrange your sofa anytime to fit your space. whether it's a growing family room or a cozy apartment.
Plus they're earth friendly and trusted by over 200,000 happy customers.
It's time to upgrade to a stress-free mess-proof sofa.
Visit washablesofas.com today and save. That's washablesofas.com.
Offers are subject to change and certain restrictions may apply.
You're listening to World Business Report from the BBC World Service.
Now, Cuba's beleaguered economy passed another worrying milestone on Monday...
The currency the peso traded on the informal market at an all-time low of 400 to the dollar.
It follows the partial dollarisation of the state-dominated economy, stoking social tensions and scarcity of basic goods. runaway inflation and deteriorating infrastructure and public services.
And it's causing consternation among Cubans.
Cuban money here in itself is useless, completely useless.
It's only good for buying food, and even then, barely.
Everything is dollars and dollars, and wherever you go, it's dollars.
And here, I don't get dollars. The government doesn't give me a dollar in my hands.
At 400 pesos to the dollar, we're talking about a pretty poor wage for us. who earn 2,000, 3,000 or 5,000 pesos.
Look at the math. How many dollars can you buy with that?
And what can you do with it? You can't buy anything.
In the end, to buy an appliance, you have to save for five or six years, given your salary and the price of the appliance.
I receive the dollar through remittances and it helps me to come here to the stores with these dollars, and I can buy the products that I don't have access to buy on the streets. because I buy them here in these stores, which makes my life easy.
Some thoughts by Cubans there in Havana.
Well, I've been talking about all this to Ricardo Torres, a Cuban economist in Washington.
The issue here is that the most important valuable goods and services tend to be sold only in dollars.
So that's a problem. Like a lot of food, you know, part of the food is sold in dollars in those dollar stores. you know, items that you need for your daily life, also Now most houses are sold in dollars, cars as well. transportation within the country, air, ground, etc.
So You need dollars to access those goods and services.
Then if you don't have them, it becomes a problem because you don't have access to And I think I'm right in saying most Cubans don't because they don't earn in dollars, do they?
That's a contiguous problem to that, which is, so most actually have to go through an informal market because the government refuses to acknowledge or to accept that those transactions are valid and by dollars.
All the foreign currencies. And this is on what you might call the informal or the black market.
Yeah, it's informal because the government doesn't sell or buy dollars openly in a formal market.
No, it doesn't. So if the people don't have, and I think it's as many as 40% of the population, don't have access to this, this makes for a A two-tier society.
There are those who can get dollars, I guess, perhaps from people they know overseas. and the rest?
Yeah, it's a divide. You may say the Cuba society right now is divided alongside of those who have access to dollars one way or the other, either because they are paid in dollars for whatever reason, or because they get dollars from their relatives.
Sometimes also it is the case these days in Cuba that some Cubans get so much Cuban pesos that they can afford to buy dollars in that informal market.
So why has the government done this? Because surely one of the principles of Cuba from the beginning of the foundation of the modern state was...
More equality since 1959. The idea was there wouldn't be rich and poor.
To be honest, it would be unfair to say that the government is doing this intentionally in terms of well, we want some part of society to not have access to dollars and then via dollars, goods and services.
The problem is that the economy is not doing well.
It hasn't done well for a long time. And then what's happening now is that the government desperately need dollars to buy even basic stuff like fuel, few medicines and food and the like.
And so they are creating all of those mechanisms to get access to the dollars that are circulating within the economy.
And that creates that problem. It's essentially an economic problem, a productive problem.
Cuba does not produce enough itself and does not export enough itself.
So you don't have access to dollars that will be enough to meet the needs of the entire population.
Now, the government itself would say that a lot of the problems, almost all the problems comes down to the... embargo between Cuba and the United States.
The United States refusing to have anything to do effectively with Cuba economically and Is that true?
The embargo is definitely one factor. out there.
So it is not realistic to say that the embargo, I mean, being the U.S., the world's largest economy and being 90 miles away from Cuba, it doesn't have an impact.
It does have an impact. Well, the economy is failing.
It creates all kinds of problems for productive systems.
That's a reality. Ricardo Torres there speaking to me earlier.
Now, ahead of Fridays, talks on the Ukraine war between Presidents Trump and Putin, the Russian leader has been speaking to one of his closest allies.
He was briefing the North Korean leader, Kim Jong-un.
Vladimir Putin's come to rely on support from North Korea...
First Pyongyang sent ammunition, then soldiers.
Now it's sending thousands of construction workers to help fulfil a huge labour shortage. created by the war.
South Korea intelligence officials have told the BBC 10,000 workers were sent to Russia last year. and many more are continuing to arrive, with more than 50,000 expected in total.
Our sole correspondent, Jean McKenzie, has spoken to six workers who've managed to escape and heard how the men are subject to slave-like conditions. with most of the money they earn sent straight to fund the North Korean regime.
We've changed the workers' names and voices to protect them.
How did your experience in Russia compare to what you had been expecting?
I was excited to go to Russia, to travel abroad and earn money.
But once I started working, it felt like I was in a labor camp, a prison without bars.
This is a young North Korean man I met back in the spring.
We're calling him Tae, and we've had somebody else read his words.
He's one of six North Koreans I've spoken to who've managed to escape from Russian construction sites over the past few years. since the war in Ukraine broke out.
Many of Russia's young men are tied up fighting or have fled.
So these North Koreans are being used to fill the country's massive labour shortage.
But they're treated appallingly. They told me they're not allowed to leave their building sites where they work 18 hours a day, every day of the week.
Here's Tay again. I was terrified when I woke up each morning, realizing I had to repeat the same day all over again.
My hands would see shut, paralyzed from the day before.
In the past, it was common for North Koreans to work abroad like this, making money for Kim Jong Un.
But in 2019, the UN banned countries from using North Korean labor. in an attempt to starve Kim of the means to build nuclear weapons.
And so most of these workers were sent home.
I've just spoken to an intelligence official here in South Korea who's told me that these workers are now flooding back into Russia.
More than 10,000 arrived last year they said and many more than that will come this year.
Eventually, they think there will be more than 50,000 of them.
The relationship between our two countries has risen to a new level of alliance.
This is Kim Jong-un announcing a defense pact with Russia last summer.
These workers are just the latest way Kim has come to Putin's defense in this war.
First, he sent ammunition. Then soldiers.
In June, a senior Russian official admitted that 5,000 North Koreans would be sent to rebuild Russia's cursed region. where Ukrainian troops took territory last summer.
I've come to meet another man who ran away from a construction site outside Moscow and made it safely here to South Korea.
He tells me that most of their earnings were sent directly to the North Korean regime.
They were told they'd get a small amount, the equivalent of about £100 a month. but only when they returned to North Korea, and there was a chance they'd get nothing.
I was shocked by how little we made. We were treated like animals not humans.
The other workers used to say we were just slaves for Kim Jong-un.
They used to taunt us. You're not men, just machines that can speak.
라며 조롱했죠. One evening, I sat with one of the workers on a bench overlooking the glittering Seoul skyline.
And he told me how lonely he was, that he missed his family back in North Korea terribly.
But still he feels lucky. Thousands are trapped in these slave-like conditions in Russia.
And it seems that many more will keep arriving long after the bombs and fighting have stopped.
Gene McKenzie there in Seoul. Now, do you like a good scare when you watch a film?
A lot of us do. If you think back over movie history, some of the high spots have been horror films.
Psycho, The Exorcist, The Shining. But in recent years, they haven't been pleasing either the critics or audiences.
Well now, that seems to have turned around.
This is a true story that happened right here in my town.
A lot of people die in a lot of really weird ways in this story, but you're not gonna find it in the news The kids walked out of those homes.
No one pulled them out. I ain't ever seen no demons.
No ghosts. heal now. Ooh, well that is two of this year's biggest horror films.
Weapons took $42.5 million in its opening weekend in US movie theatres.
It's also got 100% approval from critics on Rotten Tomatoes' website.
Another film, Sinners, has become the highest-grossing original movie of the 2020s.
Well, the share of ticket sales for horror movies at the US box office is an all-time high, 14.5%.
4% so far this year. That's up from 9.8% last year.
So has something shifted in moviegoers' tastes?
Jeremy Kay is a Screen International America editor, and I spoke to him from Los Angeles.
It goes in phases. And there are some years when horror does very well. and then other years when it's maybe not as successful as it has been.
But by and large, it's a popular genre. It always does well in film festivals.
It does well at the box office with audiences.
People like to be entertained. especially when they're going to the cinema, you're sitting together, you're gasping, you're shrieking, you're laughing together.
It's a very sort of, cathartic experience.
Horror lends itself very well to that. And it seems to be taking over from what we're used to, sort of superhero movies and Marvel Universe, that sort of thing.
I saw headlines suggesting there are no new superhero movies for the next six months.
There's definitely a gap to fill. I mean, I think the question about the superheroes is a little more nuanced.
You don't see horror films making as much of the box office as superhero movies do.
Even the ones these days that are suffering from this so-called superhero fatigue.
But it's an opportunity. Yeah, they're definitely making hay while the sun shines.
You say that superheroes always make more money than horror films.
Is that because of the sort of audience they appeal to, that it's much, much wider?
Yeah, I think so. I think it's a built-in thing whereby people come to expect the grand spectacle.
The production values are excellent. There's usually big stars who they recognize and they know the core ideas and the characters in the franchise. franchise but we have seen those numbers start to drop off since covid and there is this so-called superhero fatigue whereby audiences are just saying, you know what, we don't want the same thing all the time.
We want something original. And that may be where... horror films and films like Weapons which opened so well last weekend can jump in and prosper.
Yeah, it's interesting. Weapons and Sinners is another one that's done really well.
Who are they appealing to then? Generally speaking, it's teenagers and above.
And also something anecdotally that works quite well as a date movie.
And you'll get groups of friends going along and sitting there and having a laugh together.
It's quite a broad audience because if it's not... too R-rated or X-rated and horrifically gory.
It's just broadly entertaining, as you see that reflected with some of the ratings of these films.
And people like to be scared, I suppose.
Are these the sort of horror movies that... you think of in the light of, I don't know, The Exorcist or something like that, really, you know, quite strong stuff?
Or are they perhaps a little lighter on that?
I think they're a little bit lighter. I mean, I wasn't around when The Exorcist came out in cinemas, but obviously we've all seen it since then. remains one of the scariest films ever.
Somewhere between science and superstition.
There is another world. The world of darkness.
But what you see with something like Weapons, which I really enjoyed last weekend, is there's a sense of humour to it.
And horror and comedy often go hand in hand.
If it's done well, it's a very entertaining night out and you definitely see that with weapons.
And of course, Sinners had music. It wasn't pure gore.
There was also some mystery and a great story behind it.
Well, I'll tell you what's a mystery to me.
When you think of how terrible a lot of the news headlines are at the moment and how bad the world seems to be in various ways...
Do people really want to go and see something disturbing when they're supposed to be relaxing in the cinema?
That's another question, another conversation, another day. there aren't that many comedies out there, for example.
But I think as a diversion, horror to escapism.
It's often so outlandish that you can sit back and think, I'm going to forget about what's going on in the news and just enjoy myself.
Jeremy Kay there. Well, I hope you've enjoyed yourself listening to World Business Report.
Not too much horror and certainly plenty of news.
That's it from us. Bye. Bye. Life is a workout and Smoothie King is here to help you power through.
Whether you're crushing morning miles or sprinting through back-to-back meetings, Give your body the energy, protein and power it needs to help you conquer your goals.
Only at Smoothie King.
