Browse content similar to 10/03/2016. Check below for episodes and series from the same categories and more!
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Those are the latest headlines from BBC World News. | :00:00. | :00:00. | |
More stimulus expected from the European Central Bank, | :00:00. | :00:24. | |
Why Ireland's the latest European economy to face post-election | :00:25. | :00:29. | |
Also in the programme: Food prices surge in China but inflation is | :00:30. | :00:50. | |
Our team in Singapore will tell you all you need to know. | :00:51. | :00:58. | |
We start in Frankfurt, where in a few hours time the European | :00:59. | :01:01. | |
Central Bank and this man, its boss Mario Draghi, are widely expected to | :01:02. | :01:04. | |
beef up their already massive stimulus programme in a desperate | :01:05. | :01:07. | |
The big question - will it do any good? | :01:08. | :01:14. | |
Let's take a look at the situation as it stands. | :01:15. | :01:16. | |
In December, the ECB cut its main interest rate deeper into | :01:17. | :01:19. | |
Effectively banks have to pay to deposit their money with | :01:20. | :01:23. | |
the central bank, the idea is it will push them to | :01:24. | :01:26. | |
We are expecting that rate to be cut further today. | :01:27. | :01:33. | |
Over the past year the ECB has also spent more than 700 billion euros, | :01:34. | :01:37. | |
that's ?60 billion a month, buying government bonds and assets, to push | :01:38. | :01:40. | |
Last month, prices actually fell, bringing deflation to the eurozone. | :01:41. | :02:00. | |
And in the last three months of 2015, the region's economy | :02:01. | :02:02. | |
Many experts doubt whether further stimulus will work. | :02:03. | :02:12. | |
That includes the man who's known as the father of the euro, former | :02:13. | :02:15. | |
I stain from criticising my former institution, but I think the limits | :02:16. | :02:36. | |
of this policy are clearly seen. Take the extreme case of Japan, | :02:37. | :02:40. | |
another 100 billion didn't make any difference. It is hard to expect | :02:41. | :02:44. | |
that. So I think whatever the benefit of quantitive easing at the | :02:45. | :02:49. | |
beginning might have been, additional benefits are, if any, | :02:50. | :02:55. | |
minimal and the negative side-effects for this financial | :02:56. | :02:57. | |
system are increasing. So how would action by the ECB | :02:58. | :03:00. | |
position it compared with the other major central banks | :03:01. | :03:03. | |
around the world? It's a question that could have a | :03:04. | :03:07. | |
big impact on the currency markets. It is not done long ago we were | :03:08. | :03:26. | |
wondering which month in 2016 with the bank of -- Bank of England here | :03:27. | :03:33. | |
raise interest rates. It was put monetary policy was moving in the | :03:34. | :03:38. | |
other direction the ECB. No longer. Now it is thought the bank will cut | :03:39. | :03:41. | |
rates from a level which was already very low. So why the turnaround? | :03:42. | :03:46. | |
After all, Britain has stronger economic growth and much lower | :03:47. | :03:51. | |
unemployment than the eurozone. But it does share one problem with its | :03:52. | :03:54. | |
neighbours, persistently very low inflation. That's got the ECB | :03:55. | :03:59. | |
scratching its head and taking us into the weird world of negative | :04:00. | :04:03. | |
interest rates. The Bank of England hasn't got there yet, but maybe it | :04:04. | :04:14. | |
is getting closer. Here in Asia the bank of Japan's controversial move | :04:15. | :04:18. | |
to push interest rates below zero caught everyone offguard. The | :04:19. | :04:22. | |
Japanese yen was getting too strong for the bank's liking and hurting | :04:23. | :04:26. | |
exports and Japanese companies were holding onto massive piles of cash. | :04:27. | :04:31. | |
So to force the yen low and get company spending again, the bank | :04:32. | :04:33. | |
pushed rates into negative territory. At that in turn had a | :04:34. | :04:39. | |
negative impact on people in Japan. Savers now have to pay the bank to | :04:40. | :04:44. | |
hold onto their cash. That raises the question, what does the central | :04:45. | :04:48. | |
bank do next? Japan is still is -- still struggling and it looks like | :04:49. | :04:51. | |
the bank of Japan has limited options to get the economy off the | :04:52. | :04:52. | |
ground. Last year and America's central bank | :04:53. | :05:08. | |
went back into positive interest rates. A quarter of a percentage | :05:09. | :05:12. | |
point rise after seven years near zero isn't much. But the assumption | :05:13. | :05:18. | |
is that American rates are now on course to rise, albeit slowly. But | :05:19. | :05:23. | |
this depends on the continued growth of the world's largest economy. One | :05:24. | :05:30. | |
of the headwinds it faces is the strength of the US dollar, which | :05:31. | :05:34. | |
makes American exports more expensive abroad. If the decision to | :05:35. | :05:39. | |
buy other central banks, like the ECB, strengthen the dollar further, | :05:40. | :05:44. | |
who knows what the knock-on effects will be. -- decision by other. | :05:45. | :05:48. | |
That was our team based all around the world. As soon as we get any | :05:49. | :05:56. | |
news later this morning we will update you hear on BBC World News. | :05:57. | :06:00. | |
Also there will be more allowances on that in about 3-4 minutes when we | :06:01. | :06:04. | |
review the papers. It is all over the financial papers today. People | :06:05. | :06:08. | |
trying to guess what's coming and of course analysis of what it will do | :06:09. | :06:11. | |
or not do to help the eurozone economy. Now, moving on to the | :06:12. | :06:16. | |
second-biggest economy. We've had new south of China again today, this | :06:17. | :06:20. | |
time about consumer prices or inflation jumping more than most | :06:21. | :06:23. | |
people expected in the last month. Is it evidence the economy is | :06:24. | :06:27. | |
in better shape than we thought, or Let's get the latest from Rico Hizon | :06:28. | :06:30. | |
in Singapore. The -- lovely to see you. This is | :06:31. | :06:43. | |
the month of February, which is unusual because of the lunar New | :06:44. | :06:46. | |
Year holiday. Talk us about this news and what it means for China. | :06:47. | :06:51. | |
That's right. The Chinese New Year, when a lot of mainlanders go back | :06:52. | :06:55. | |
home and buy gifts, they buy food, clothes for their loved ones. This | :06:56. | :07:02. | |
is basically what spurred China's consumer spending in the month of | :07:03. | :07:05. | |
February. At the big question is, can this be sustained? That's a big | :07:06. | :07:12. | |
question mark. For now, inflation is accelerating at its fastest rate in | :07:13. | :07:16. | |
almost two years to 2.3% in February and that is from 1.8% in January. | :07:17. | :07:24. | |
This recent rebound in oil prices is one of the fastest. Recovering food | :07:25. | :07:31. | |
prices, these types of things are contributing to the higher inflation | :07:32. | :07:35. | |
rate and the pickup in food prices is mainly due to cold weather and of | :07:36. | :07:39. | |
course the Chinese New Year seasonality effect. Despite this | :07:40. | :07:45. | |
encouraging headline number, economists say the rise in food is | :07:46. | :07:48. | |
likely to be temporary and that consumer inflation will remain mild | :07:49. | :07:54. | |
in the coming months and may not reach it target. On the flipside | :07:55. | :07:57. | |
there was another number that came out today and that's the Consumer | :07:58. | :08:02. | |
Prices Index. That was disappointing again. If you look at the positive | :08:03. | :08:07. | |
side, it fell, but the decline slowed. This affects the sluggish | :08:08. | :08:13. | |
demand, overcapacity in key sectors. Producers remained stubbornly weak | :08:14. | :08:25. | |
with the index diving by 4%. It is a positive because of course the pace | :08:26. | :08:28. | |
of decline was lower. But if you put all of this development together | :08:29. | :08:32. | |
they say it will take some pressure off policymakers to roll out more | :08:33. | :08:36. | |
monetary easing. Thanks a lot. Good to see you. | :08:37. | :08:39. | |
We are also in Ireland, the latest country in Europe to | :08:40. | :08:41. | |
find itself in political deadlock after inconclusive elections. | :08:42. | :08:47. | |
Like their counterparts in Spain and Portugal, Ireland's government | :08:48. | :08:50. | |
found themselves punished in recent elections | :08:51. | :08:51. | |
But no party won a large enough majority to form | :08:52. | :09:00. | |
a government and the result has been drawn-out coalition talks. | :09:01. | :09:02. | |
Ireland's parliament re-convenes later to try and choose | :09:03. | :09:04. | |
We will be keeping an eye on that story today, with further analysis | :09:05. | :09:11. | |
later on the BBC. In other news: Volkswagen's top | :09:12. | :09:15. | |
executive in the US is stepping down, nearly six months after | :09:16. | :09:18. | |
the German carmaker became engulfed The company says Michael Horn is | :09:19. | :09:21. | |
leaving "through mutual agreement". Another US executive, | :09:22. | :09:24. | |
Hinrich Woebcken, Mr Horn's departure comes as VW | :09:25. | :09:26. | |
continues to negotiate with US environmental regulators, the | :09:27. | :09:33. | |
Department of Justice and lawyers representing consumers who are suing | :09:34. | :09:35. | |
the company for compensation. Singapore has again been judged | :09:36. | :09:38. | |
as the world's most expensive city. The Economist Intelligence Unit, | :09:39. | :09:43. | |
ranked it as the priciest ahead of Zurich, Hong Kong, | :09:44. | :09:47. | |
Geneva and Paris. London was sixth and New York | :09:48. | :09:50. | |
seventh on the list that compares the cost of a | :09:51. | :09:51. | |
basket of goods across 133 cities. The cheapest were Lusaka, | :09:52. | :09:55. | |
the capital of Zambia, followed by Bangalore and then Mumbai in | :09:56. | :09:59. | |
India. Marcus today are heat. Oil is at a | :10:00. | :10:16. | |
three-month high, which is keeping energy stocks attractive at the | :10:17. | :10:20. | |
moment. -- markets. We had a good close on Wall Street the night | :10:21. | :10:24. | |
before. And New Zealand, a surprise cut in interest rates down to 2.25%. | :10:25. | :10:27. | |
See you soon. | :10:28. | :10:42. |