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Summary

  1. Top EU lawyer approves ECB bond-buying scheme
  2. Game Digital shares plummet on profit warning

Live Reporting

By Ben Morris and Matthew West

All times stated are UK

Get involved

Matthew West

Business Reporter

Right that's it for another day. Tomorrow there are trading updates from Argos and Homesbase owner Home Retail Group, Bovis Homes, Tullow Oil and Primark owner, Associated British Foods. Plus we have German GDP data for 2014. We'll bring you all that plus whatever else we unearth from 06:00.

Ryanair launches in-flight films

Ryanair chief executive Michael O'Leary.
Ryanair

Ryanair is to begin offering in-flight entertainment on its flights for the first time. Passengers will be able to watch TV shows and films on smartphones or tablet devices through an on board Wi-Fi network. What's more, in a departure from Ryanair's usual business model, they will be offered for free.

Via Blog

Robert Peston

Economics editor

"

What investors want is a big and bold commitment to QE, rather than a timid, constrained trial - and it is thought that German assent is essential for an ambitious, substantial programme of bond purchases... But unless eurozone governments seize the moment to fix their finances and improve the competitiveness of their private sectors, the region will remain economically anaemic."

JP Morgan profits fall

JP Morgan sign
Getty Images

JP Morgan Chase has reported a fall in fourth quarter profit. Net income fell 6.6% to $4.9bn. The results were hit by a 23% fall in revenue at its trading operations, which was partly due to the sale of its commodities trading business.

Gold prices

Gold spot
Bloomberg

As the chart above shows, it has been a bumpy 12 months for

gold prices, falling as low as as $1,144 per ounce in November last year. Since then gold has perked up to trade at around $1,228 per ounce. "The precious metal will recover further this year and next. The prospects for silver look brighter too," says a research note from Capital Economics today.

Peugeot sales rise

Peugeot factory
Getty Images

After three years of declining sales,

Peugeot Citroen has reported a sales increase. Last year, the car maker sold 2.9 million vehicles, up 4.3% on the previous year. China become its biggest market with sales of 734,000, up almost 32%. Last year
China's Dongfeng Motor took a stake in Peugeot as part of a bailout package.

Mortgage lending

a row of houses in west London
PA

The CML says the easing back of activity in the property market is "not completely unexpected" as there is usually a seasonal lending dip in the winter months. It still expects lending to grow over the next two years reflecting the more stable economic conditions.

Kuoni departs tour operating

Kuoni website
Kuoni

Switzerland's Kuoni Group

is getting out of the tour operating business. Kuoni is one of Europe's biggest tour operators but says the business faces "increasing challenges" and would be best developed "under new leadership". The operations affected employ 3,800 people and have sales of 2.2bn Swiss francs (£1.4bn).

Mortgage lending

Mortgage lending fell sharply in November, data from trade body the Council of Mortgage Lenders (CML) has said. The body which represents 95% of mortgage lenders says lending was 7% lower compared with a year earlier. The number of loans advanced to first time buyers fell 11% in November compared with October but was 6% higher than the year before.

Eurozone industrial production edges up

Graph showing industrial production output in the eurozone
Eurostat

Eurozone factory output increased by slightly more than expected in November, despite stagnant production in Germany. Industrial production rose by 0.2% in November, following small gains in October and September, the

EU's statistics agency, Eurostat says. That was better than the flat reading expected by economists.

Germany balances budget

ECB president Mario Draghi talks to German Chancellor Angela Merkel
AFP

Germany has announced that it has balanced its budget for the first time since 1969, while pressing its eurozone partners to follow its austere example, rather than trying to stimulate their stagnant economies with borrowing or central bank money-printing. Germany has achieved its aim a year earlier than planned thanks to strong tax receipts and lower debt service costs.

ECJ opinion

Mario Draghi, President of the European Central Bank
AFP

The ECB has few other options left apart from buying sovereign bonds in order to combat deflation in the eurozone, Bank president Mario Draghi has said. Mr Draghi told German weekly newspaper

Die Zeit there were "differences" within the Bank over how to combat deflation "but it's not as if we have an endless amount of possibilities". He also said the risks of deflation were greater now than a year ago.

OMG it's OMT

Watch out for talk of OMT (not to be confused with OMG). It stands for Outright Monetary Transactions and refers to the

purchase of government bonds by the European Central Bank. Policy makers at the ECB meet an 22 January and are expected to launch a stimulus scheme that involves buying up government debt.

Via Email

Jonathan Loynes

Chief European Economist, Capital Economics

EU flags
Getty Images

Overall, then, the final hurdle to quantitative easing appears to have been cleared. But given the ECB's natural caution, Germany's objections and the limited effects of QE in other countries, it would be hopeful to expect it to transform the euro-zone's economic outlook.

Fuel bills

Radio 5 live

Energy Secretary Ed Davey has been speaking to

Radio 5 live. Asked if he should be pushing the Big Six energy companies
harder to reduce prices, Mr Davey says that the government has increased pressure on those firms by raising competition. He says that government measures have made it easier for customers to switch firms and easier for new firms to enter the industry.

ECJ opinion

In the opinion of the advocate general the ECB should not be allowed to buy bonds from countries that are receiving financial assistance from the ECB, like Greece for instance.

ECJ opinion

We should point out that today's news from the ECJ is not necessarily the final word. This is the initial opinion of the court so we're not yet at the final decision yet. That said, it is rare that opinions are overturned. So what does the ECJ opinion mean? Well, the last obstacle to the ECB buying government bonds has been swept away.

Via Twitter

Linda Yueh

Chief business correspondent

"

ECJ advocates-general issued interim ruling that #ECB's OMT "in principle" adheres to European law; paves way for #QE"

ECJ opinion

The European Central Bank does have the legal authority to buy eurozone government bonds, according to the advocate general of the European Court of Justice, Cruz Villalón. He's one of the top lawyers at the European Union.

Market update

The

FTSE 100 Index is 1.49% lower at 6,444.68 with miners leading falls. That's been led by falling commodity prices with copper falling to a five-and-a-half year low today.

Game Digital shares plummet

Game Digital store
Game Digital

Game Digital shares have plummeted 50% after
the company issued a profit warning after the market closed on Tuesday. The company's Black Friday discounts appear to have backfired. While sales volumes lifted, profit margins were hit which will result in flat earnings for the financial year to 1 August.

Burberry sales

Burberry Prorsum Autumn/Winter 2015 collection
Reuters

Burberry has warned that a fall in sales in the key market of Hong Kong in the last quarter of 2014 could impact its full-year profit margin. It said retail sales rose 14% to £604m in the three months to 31 December.

Newspaper review

Business pages
BBC

The lead story on the Financial Times today is based on a

BBC interview with Bank of England governor Mark Carney. "Carney hints rates to stay frozen longer as inflation hits 15-year low" the headline says.
The Telegraph picks up on different comments from Mr Carney. "Britain could fall into deflation," reads the headline in its business section. Departing Morrisons boss Dalton Philips was paraded like "some errant heifer" yesterday, according to the Times business editor, Alistair Osborne.

Eurozone stimulus

BBC Radio 4

Euro notes
Getty Images

Does the European Central Bank (ECB) have the power to buy government debt? The European Court of Justice (ECJ) will rule on that later today after Germany raised concerns. Henning Meyer, editor of Social Europe tells

Today it is unlikely the court will rule that the ECB can't buy government bonds but it "might have some bones to pick" in terms of how the ECB goes about launching a quantitative easing programme.

Morrisons woes

Radio 5 live

Former Morrisons board director, Roger Owen,

has been highly critical of the leadership of departing chief executive Dalton Philips. But Bryan Roberts from Kantar Retail says there is a degree of sympathy for Mr Philips. Many errors were made before he even took over and his strategy was "bang-on in a number of ways" Mr Roberts tells
Radio 5 live.

Falling inflation

BBC Radio 4

Mr Alexander says there is a big difference between the one-off effect of the oil price falling and persistent low inflation that has been seen in other economies such as Japan. The government and Bank of England remain vigilant to the threat of deflation however, he adds.

Falling inflation

BBC Radio 4

Chief Secretary to the Treasury Danny Alexander
BBC

Chief Secretary to the Treasury Danny Alexander tells

Today
lower inflation is the result of the very large fall in the price of oil. That has obvious implications for the North Sea oil and gas industry, but, by and large, lower oil prices are good news. "We've had plenty of headwinds over the last four years, this is a bit of a tailwind for the economy," he says.

Premier Oil update

Premier Oil is taking $300m charge related to the fall in value of some of its assets due to falling oil prices. The company says it "will continue to invest in high quality projects only if they are robust at our conservative oil price assumptions". Premier Oil also reported a 9.3% rise in production last year to a record level.

Supergroup sales

Supergorup chief executive, Euan Sutherland,
Reuters

Supergroup, which last autumn announced it had hired former Co-op boss Euan Sutherland, as its new chief executive has reported a 12.4% rise in like-for-like sales in the 11 weeks to 10 January. While all regions performed well, it says, online sales were particularly strong. Supergroup maintains its profit outlook for the year of between £60m to £65m.

Ocado trading

Online grocery firm,

Ocado reported a 14.8% rise in sales for the 31 days of December.

US-EU trade deal

BBC Radio 4

The US and EU are currently negotiating what would be

the biggest trade deal in history. But the deal has no shortage of critics who say the deal, which uses arbitration panels, threatens national sovereignty. International arbitration lawyer Matthew Weiniger, tells
Today such concerns are unfounded. Arbitration panels have been around for the past 50 years, he says.

European deflation

BBC Radio 4

Changing topic Carl Weinberg tells

Today that even if the European Central Bank (ECB) starts buying European government debt - as many expect it to announce next week - "it is not what Europe needs right now". He says the biggest problem European faces it that its "banks don't have enough capital and the ECB can't help them recapitalise whatever it does," he adds.

World Bank forecast

BBC Radio 4

The US economic recovery "seems to be robust" and will contribute to global GDP growth

as the World Bank suggests, US economist Carl Weinberg tells the
Today programme. But he is puzzled by the World Bank's argument that global growth is reliant on the US. China, he says, "is growing at two and half times the rate of the US" and therefore contributing more to world growth.

Oil prices

BBC News Channel

Amrita Sen, energy analyst at Energy Aspects
BBC

According to the FT today

US oil production will rise both this year and next despite falling prices. Why? Amrita Sen energy analyst at Energy Aspects tells World Business Report it takes time for high cost oil producers to cut back. Meanwhile, OPEC can't agree on how far to cut production either. The upshot is an even lower oil price, she adds.

Gas prices

Radio 5 live

Gas hob, with E.on logo
PA

Later today MPs will debate an opposition motion on energy prices.

Yesterday E.On announced a cut in its standard gas tariff. Jessica Lennard, head of corporate affairs at Ovo Energy, says the Big Six have not cut that particular rate for 12 months, despite falling wholesale prices, so it was about time one of them made a move. Energy Secretary Ed Davey will be on
Radio 5 live after 08:00.

Morrisons woes

Radio 5 live

Roger Owen says Morrisons' move into convenience stores was made "in a panic". Many of the new stores are in the wrong place and Morrisons is paying too much in rent. To secure the first convenience store Morrisons gazumped a rival tenant by 30%, says Mr Owen. On

Radio 5 live he says the company now needs a proper grocer in charge.

Morrisons woes

Radio 5 live

Morrisons store
Reuters

A brutal assessment of

Dalton Philip's time in charge at Morrisons by Roger Owen a former director of the supermarket chain. The company has "neglected" core customers and been "deflected into side shows". Staff have become demoralised due to cuts and customers have suffered as a result, he says on
Radio 5 live.

UK deflation?

Radio 5 live

pound coins
Getty Images

We're not seeing deflation here in the UK economy, says US economist Carl Weinberg on

Radio 5 live. You can't have deflation without falling wages and we're not seeing that, he says. He also points out that CPI is just one measure of inflation. "Core" inflation is running above 1%.