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