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Those are the latest headlines from BBC World News. | :00:00. | :00:00. | |
Now for the latest financial news with | :00:00. | :00:00. | |
As if China wasn't enough to worry about, could US be | :00:00. | :00:21. | |
The latest growth numbers may add to fears | :00:22. | :00:24. | |
Plus, hold onto your hats: Japan's central bank takes emergency action | :00:25. | :00:33. | |
to stave off the effects of the global turmoil. | :00:34. | :00:35. | |
It's introduced negative interest rates. | :00:36. | :00:36. | |
In a moment, who'd be a central banker? | :00:37. | :00:59. | |
Policy makers around the world are fast running out of ammunition. | :01:00. | :01:02. | |
We start in the United States amid growing fears | :01:03. | :01:10. | |
the world's number one economy is stalling badly, and could even be | :01:11. | :01:13. | |
The latest growth figures are out in a few hours' time. | :01:14. | :01:19. | |
They're being awaited anxiously by financial markets already badly | :01:20. | :01:21. | |
I want to show you how things have been going downhill for the US. | :01:22. | :01:35. | |
In the three months to June last year, the second quarter of 2015, | :01:36. | :01:41. | |
the US economy was growing at a healthy annual rate of 3.9%. | :01:42. | :01:44. | |
By the third quarter of 2015, the three months to September, | :01:45. | :01:47. | |
Economist on average think that in the three months to the end | :01:48. | :02:05. | |
of December, growth in the US economy slumped to just 0.8%. | :02:06. | :02:11. | |
Some though think it could be closer to zero, | :02:12. | :02:13. | |
as the global market turmoil takes its toll on people's confidence. | :02:14. | :02:16. | |
A few even think the economy actually shrank in the last quarter. | :02:17. | :02:31. | |
So is there a real risk of the US economy going into reverse, in other | :02:32. | :02:35. | |
Our New York reporter Nada Tawfik has been been getting the views | :02:36. | :02:40. | |
This shop has survived in competitive Manhattan for several | :02:41. | :02:58. | |
years. It is the coldest months, and the Christmas shopping season drives | :02:59. | :03:07. | |
sales. The co-owner, Adam, says that wasn't the case this year, leaving | :03:08. | :03:15. | |
him with many unsold parkers. The warmest Christmas in history, it was | :03:16. | :03:19. | |
70 degrees here and Christmas. That hurts our sales. The weaker pound | :03:20. | :03:30. | |
means that fewer people come here, and that tends to be part of our | :03:31. | :03:36. | |
customer base. Shopping districts have been a sea of for sale signs. | :03:37. | :03:42. | |
The key question many are now asking is if this is a sign of trouble | :03:43. | :03:49. | |
ahead. Many may think so when GDP figures for the final months of 2015 | :03:50. | :03:55. | |
are released, but not so, says Ellen set nav of Morgan Stanley. Not time | :03:56. | :04:03. | |
to panic yet, saying that the economy completely fell on its face. | :04:04. | :04:06. | |
That is what it will look like, but you have to look at the underlying | :04:07. | :04:11. | |
details. No doubt that will really fan the flames of those recession | :04:12. | :04:14. | |
fears, which have grown over the last several weeks. Adding to this, | :04:15. | :04:21. | |
low gas prices means consumers spending more. So, you are not | :04:22. | :04:28. | |
tempted to spend your money? No. I am in New York, I have to play | :04:29. | :04:34. | |
smart. The money you save? I will put it in my pocket. America is | :04:35. | :04:39. | |
still one of the bright spots in an otherwise gloomy global picture, but | :04:40. | :04:43. | |
if consumers don't carry on spending, all of that could change. | :04:44. | :04:48. | |
To Asia now where in the last hour or so the Bank of Japan has narrowly | :04:49. | :04:52. | |
voted to introduce a negative interest rate policy. | :04:53. | :04:54. | |
Effectively it will cost you 0.1 of a percent to deposit your money | :04:55. | :04:57. | |
It hopes that will encourage commercial banks to lend more and | :04:58. | :05:01. | |
Of course it's a response to the global market turmoil | :05:02. | :05:04. | |
on the slowdown in China - that has rather torpedoed Japan's attempts to | :05:05. | :05:08. | |
Mariko Oi is following the story for us in Singapore. | :05:09. | :05:14. | |
This is Japan's central bank telling all the banks in Japan not to give | :05:15. | :05:21. | |
their money to them, but to put it out and lend it to people and | :05:22. | :05:26. | |
business. That is right, it is aimed at encouraging people and companies | :05:27. | :05:30. | |
to start spending money again, because Japan's economy, while it | :05:31. | :05:37. | |
was recovering gradually because of the economic policies of PM Shinzo | :05:38. | :05:43. | |
Abe, known as Abenomics, recently it has been slowing down again, | :05:44. | :05:45. | |
especially with the Chinese slowdown. The market turmoil has | :05:46. | :05:52. | |
been perfect in the stock market as well. As recently as last week, the | :05:53. | :05:58. | |
governor of the bank of Japan was believed to have ruled out the | :05:59. | :06:01. | |
negative rates option, so it caught markets by surprise, within the | :06:02. | :06:06. | |
Nikkei jumping 3% after the announcement. Japan has been | :06:07. | :06:09. | |
thinking about this option since early 2000, but it has always | :06:10. | :06:16. | |
decided against it. The European Central Bank has negative rates as | :06:17. | :06:19. | |
well. These huge question marks over the | :06:20. | :06:27. | |
health of the global economy are providing a major dilemma for the | :06:28. | :06:30. | |
people in charge of the world's monetary policy, the central banks. | :06:31. | :06:33. | |
Interest rates are already at rock bottom, so what ammunition do they | :06:34. | :06:36. | |
have left? The Bank of Japan is not The Bank of Japan is not | :06:37. | :06:46. | |
the only one being forced Earlier this week the | :06:47. | :06:49. | |
US Federal Reserve said it was It is promising gradual | :06:50. | :06:54. | |
adjustments to policy. But investors are betting interest | :06:55. | :06:56. | |
rate rises are on hold for a while at least The Bank of England's Mark | :06:57. | :06:59. | |
Carney has also been caught on the hop, having signalled that rates | :07:00. | :07:03. | |
would start to rise this year. He described | :07:04. | :07:09. | |
the current global economic climate as unforgiving, and ruled out | :07:10. | :07:10. | |
an immediate rate rise in the UK. The head of the | :07:11. | :07:13. | |
European Central Bank, Mario Draghi He says the bank will review | :07:14. | :07:16. | |
and possibly reconsider monetary policy at its next meeting, that's | :07:17. | :07:19. | |
been taken as a hint there could be To underline the hard time central | :07:20. | :07:23. | |
bankers are having at the moment, at a speech in Germany this week | :07:24. | :07:34. | |
Draghi hit out at critics who say The ECB is fulfilling its mandate. | :07:35. | :08:10. | |
These figures do not stand up to scrutiny. The critics of our | :08:11. | :08:15. | |
decisions have been proved wrong time and again. | :08:16. | :08:17. | |
Our guest is from the Economist Intelligence Unit. | :08:18. | :08:21. | |
Thank you for getting up at this terrible power. Is there a point | :08:22. | :08:28. | |
about the critics to Mario Draghi? If they start turning on the | :08:29. | :08:32. | |
printing press and pushing cheap money into the system, we have seen | :08:33. | :08:36. | |
it with the US Federal Reserve, the bank of Japan, it is being suggested | :08:37. | :08:40. | |
that in the long-term, those policies don't really work. | :08:41. | :08:49. | |
Obviously, there are lots of actions, including the ECB and Bank | :08:50. | :08:54. | |
of Japan, but they all face headwinds at the moment. It is a | :08:55. | :08:57. | |
question of confidence. As much as they try to make money cheaper, with | :08:58. | :09:02. | |
the economy slowing down there is an issue that people are just not | :09:03. | :09:06. | |
confident enough to invest, because they see China slowing down and the | :09:07. | :09:14. | |
global economy. Is it not some of the central banks' fault in the | :09:15. | :09:17. | |
first place that we are seeing China slowdown? We printed all this free | :09:18. | :09:24. | |
money, flooding China, which then built a lot, and now a lot of that | :09:25. | :09:28. | |
money has drained back out and left some emerging economies in a dire | :09:29. | :09:35. | |
state. It has created an awful lot of trouble, Andy quantitative easing | :09:36. | :09:43. | |
is coming back, and there are consequences of that. But to deal | :09:44. | :09:51. | |
with poor global growth prospects, you can't just rely on monetary | :09:52. | :09:57. | |
policy alone. There is also fiscal policy and structural reforms, some | :09:58. | :10:00. | |
of which are under way at the moment. They will take time, and | :10:01. | :10:05. | |
people will say that some economies haven't done the proper reform. Can | :10:06. | :10:13. | |
I ask you this, as a layman I am a bit alarmed. Either that all the | :10:14. | :10:16. | |
numbers in the experts on what they are saying about 2016, I'm worried. | :10:17. | :10:20. | |
If we head towards another sort of global crisis, a big slowdown, there | :10:21. | :10:26. | |
are no more tools or ammunition left in these central bankers to fight. | :10:27. | :10:29. | |
They have already used all of that up fighting their 2008 crisis. | :10:30. | :10:36. | |
Absolutely, and that is why we need to rely on structural reforms and | :10:37. | :10:39. | |
fiscal policy as well. They are a long time coming, so that doesn't | :10:40. | :10:41. | |
bode well. Shares in Amazon tumbled | :10:42. | :10:47. | |
in after-hours trading after results from the online retail | :10:48. | :10:49. | |
giant disappointed Wall Street. Amazon racked up quarterly sales of | :10:50. | :10:55. | |
more than $35 billion in the three months to December - up more | :10:56. | :11:01. | |
than 20 per cent on the previous year - taking annual sales above 100 | :11:02. | :11:06. | |
billion for the first time. | :11:07. | :11:13. |