16/03/2016 World Business Report

Now, for the latest financial news with

Is the US economy strong enough to continue on its path of rake hikes?

George Osborne is walking a tightrope with less money

in government coffers and a weaker economy,

Also in the programme: Could the Foxconn

Shares in the Japanese electronics maker are plunging.

We've been watching Central Banks all this week,

but by far the biggest is the US Federal Reserve.

It's rate-setters have been meeting, and are due to hold

Investors will be looking for insights into the health

of the world's biggest economy and of global growth.

Economists will scrutinise every word uttered by

US Fed Chair Janet Yellen for clues about the path of interest rates,

known as the "dot plot," and about the outlook for the US economy.

The Fed raised the cost of borrowing in December for

And hinted rates could go up four more times this year,

although many economists now predict just two or three.

Recent data has shown the US economy in good health, with inflation and

Michelle Fleury reports from New York.

In midtown Manhattan, a familiar sight - the lunch cart. Not a bad

place to look to understand the challenge facing the Federal

Reserve. While the cost of eating has gone up, these office workers

told us their pay cheque haven't. When was your last pay rise? Never.

I haven't got one. Just at it. Ten years? Really? Really. I have had a

pay decrease. I am a contract. I have to find jobs where I can. And

wages not rising fast enough is an economic problem for those inside

here. America's central bank wants to raise interest rates, but some

Fed officials mightn't feel they can until they see signs of inflation.

It is a clear signal that economic slack caused by the great recession

has not been totally squeezed out of the system and if wage growth is

flat there will be little pressure on prices, so they can be more

patient. What can we expect from the Fed chair, Janet Yellen? It is very

unlikely they will make a change in interest rates but they might give

us a hint about how likely they might be moving in June. While the

US recovery is underwhelming, the country's economic fortunes are

moving in the right direction. That is why it increasingly people

believe that America's central bank will continue to raise interest

rates, just not this month. And we will be right across that US

Federal Reserve decision and press conference later on in the day, but

let's talk about the other big event.

That is taking place right here in the UK -

the British Finance Minister, George Osborne, will announce

After presenting a very upbeat report

on the health of the British economy last year, the chancellor now has

a series of headwinds to cause him concern - the most pressing being a

vote on whether the UK should leave the European Union trade block.

As sterling weakens and the British economy looks set to slow,

there are now concerns that more spending cuts are needed.

We ask three of the BBC's top editors what they

George Osborne has been the Chancellor for a long time and

during the six years, but of his reputation has been built on either

trying to sort the books out or making cuts to public spending,

depending which way you look at the argument. Look out for more cuts to

come. A couple of weeks ago he warned that because of the way the

economy was moving, he was still going to have to take the axe to

public spending, which might feel like a contrast to his statement six

months ago at the spending review when he suggested the economy was a

long way back from the crash. He wants to cut the ?70 billion budget

deficit to zero so the government earns more than it spends. I think

business taxes will probably be increased and also of course there

will be more cuts to some public services. But when it comes to

individuals, he may give us all a tax cut, which he will do by

increasing the level at which we start paying tax and also increase

in the level at which high rates of taxes kick in. One of the things of

the Chancellor will try to do is instil confidence in business which

has taken a knock with EU Referendum uncertainty, so expect him to try to

lay out certainty for business about what taxes and costings they will

face, perhaps a business tax roadmap to try to achieve that. The other

thing to look out for is that the Northey is in trouble. He is making

no tax on the profits from the North Sea -- North Sea. He might cut taxes

to stimulate more investment. Laura, Kamal R, all on Twitter, by

the way -- and Simon. They will be tweeting throughout the day and we

have the Business Live page online, do watch it, as it will be updated

constantly on the latest announcements and it will be

broadcast on TV and online as well. If you want to know what's

happening, be sure to stay with us here on the BBC. Let's move on.

Shares in the Japanese electronics giant, Sharp, have fallen 9% over

fears a takeover by the Taiwanese firm Foxconn may be in jeopardy.

It is nice to see you, Rico. It is on and off, where are we? Well, at

least moment, it seems like it is in limbo and there is a possibility

that this deal, Sally, could be in trouble. At this point, sources said

some of those familiar with the deal say it mightn't happen this week.

What could really stifle this arrangement is the Taiwan group

wants clarity on the liabilities of Sharp that it has uncovered to the

end of 2015, and they are seeking guidance from the loss-making

Japanese electronics maker on its latest quarterly performance. A

Sharp spokesman said the companies are working hard to reach a

satisfactory agreement as soon as practically possible, and having not

set a signing date. That's why we are seeing investors nervous with

this uncertainty, unloading Sharp stocks amidst calls the deal

mightn't materialise. Going back to where it started, the Sharp board

announcing Foxconn's offer acceptance worth $6 billion over a

competing bid from innovation network Corporation of Japan, and it

would be the largest purchase of a Japanese company from a foreign

company. That is all. Thank you, Rico.

South Korea has had a contraction in the manufacturing and construction

sector in South Korea. Nigeria's state-owned oil company

has failed to pay the government $16 billion in what an official

audit says is a suspected fraud. The auditor general says

the Nigerian National Petroleum Corporation has provided no

explanation for the missing funds. Apple has said the Founding Fathers

of the US would be "appalled" by the ongoing battle

between the technology giant and the US government over access to

an encrypted mobile phone. The FBI wants Apple to develop

software so it can unlock the iPhone which belonged to one

of the gunmen involved in the Google's head

of its self-driving cars has urged politicians to make sure the US sets

consistent laws on the technology. Chris Urmson told

a Senate hearing the US Transport Secretary should be given authority

over the matter rather than it being Let's have a look at markets. So, in

Asia, they are treading nervously, really, ahead of today's decision

and news conference from the Federal Reserve. Everybody, pretty much

everybody, is in agreement that today nothing will happen in terms

of interest rate changes, but many economistss predict the next rise in

US rates will take place around June. So, what's happening today?

The dolly strengthening, which is good news for Japan. -- dollar is

strengthening. Shares are lower and Sharp is the big loser in Tokyo.

This is how things ended in the US. Of course, the Fed started their

meeting yesterday, and it finishes today. A mixed picture emerging in

the United States. Keep an eye on the town today with the budget as it

is announced, beginning at 12:30pm UK time. The US dollar will likely

remain strong today with the Federal Reserve very much in focus. We will

talk about those issuers in more detail in a couple of minutes when

we review the papers. I will see you then. -- issues.

An extra ?1.5 billion in education funding is set

to be the key giveaway when the Chancellor, George Osborne,

He will also give details on another ?4 billions he wants to

make in spending cuts as he tries to balance the country's books.

He will also give details on another ?4 billions he wants to

make in spending cuts as he tries to balance the country's books.