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Summary

  1. ECB launch €60bn per month bond buying scheme
  2. Day two of World Economic Forum in Davos
  3. Balfour Beatty announces more construction losses

Live Reporting

By Howard Mustoe and Tom Espiner

All times stated are UK

Howard Mustoe

Business reporter

That brings us to the end of another eventful day. Davos's usual service was overshadowed by the European Central Bank's €1.14trn bond buying spree. Join us for more tomorrow from 06:00.

And finally

Ray Mears
BBC

Ray Mears has been unceremoniously axed from the Caravan, Camping and Motorhome Show at Birmingham's NEC next month

and lost a £10,000 appearance fee, according to the Daily Mail. That's after he called caravans "hideous" on Room 101 last week. Oops. The show explain their
reasoning here.

Davos 2015

pierre
AFP

Pierre Moscovici, European economic and financial affairs commissioner spoke to Newsnight's Evan Davis earlier. With the US economy recovering and China coming to terms with its own slowdown, is Europe "the problem," asks presenter Evan Davis? "Europe now is not the problem" and hasn't been for two years, says Mr Moscovici. "We are out of it" (trouble, he means), but growth is needed, he says.

Via Email

Davos 2015

Emily Young

Business reporter

Schmidt
Reuters

Google chairman Eric Schmidt reckons nearly all of the problems debated here at Davos could be solved by more broadband. Education, human rights, health. Wire up the citizens and they will take care of the rest, he says.

Market update

The

FTSE 100 index reached a four-month high after the European Central Bank launched a massive sovereign bond purchase programme to extinguish deflation and spur growth. The index touched a peak of 6,797.01 points before closing at 6796.63, up 1%. France's
Cac rose 1.5% and Frankfurt's
Dax rose 1.3%.

  • Royal Mail rose 3% after saying sales for the nine months to Dec. 28 rose 1%
  • Insurer RSA rose 3% after Credit Suisse raised its recommendation on the stock

Davos 2015

Emily Young

Business reporter

poster
BBC

This advice in Davos spotted by the BBC's Emily Young. Avoid taxis, helicopters and private jets in getting from your hotel to the conference appears to be the message. Or if you must take your Bentley or Maybach, maybe car share. This after

various commentators pointed out that
around 1,700 private jets are expected to
ferry the great and the good to and from Davos this week.

ECB stimulus and central banks

Reuters has some interesting comparisons about how central banks have factored the prospect of ECB bond buying into their equations: "The Swiss National Bank had to remove its cap on the value of the franc last week, Denmark has pushed rates deeper into negative territory and two British rate setters at the Bank of England have dropped calls for a rate hike,"

it said.

Davos 2015

The world's central banks are all competing to weaken their currencies, according to Goldman Sachs president Gary Cohn. Money printing and bond buying depresses a currency's value which helps a country's exporters compete with cheaper prices. "We're in currency wars," he told a debate in Davos.

Huawei founder on spying accusations

Ren
AP

The founder of Chinese telecom tech firm Huawei has denied being instructed to spy on UK communications by the Chinese government in a rare interview. Ren Zhengfei told BBC chief business correspondent Linda Yueh that the firm had "never taken instruction from the Chinese government to spy on other governments".

Via Twitter

David Buik

Panmure Gordon analyst

tweets: At 4pm who would have believed the FTSE 100 would be up 78 points at 6806 - up 6.3% since 6th January 2015, after oil & political turmoil

ECB stimulus plan

oil
BBC

Oil prices dropped after the bond buying programme was announced, with the benchmark Brent crude oil futures falling below $49 a barrel. But they were lower earlier in the day. "The ECB bond buying programme was larger than expected," said Olivier Jakob, oil analyst at Petromatrix in Zug, Switzerland. "It was largely priced in."

Davos 2015

Padoan
BBC

Italian Economy Minister Pier Carlo Padoan has been interviewed by the BBC's Robert Peston in Davos. The ECB bond buying programme is "ambitious, it has done something good for the eurozone," he says. Italy and other nations need to "free up markets" to provide investment opportunities, he adds.

Via Email

ECB stimulus plan

Nigel Cassidy

BBC Europe business correspondent

"Arriving somewhat breathless for his news conference thanks to broken lifts, ECB president Draghi finally produced a QE package for Europe that received an initial thumbs-up from the financial markets. On the question of sharing some of the risks of his bond-buying spree with the 19 national banks, Mr Draghi came out fighting, saying such arrangements were quite normal, and he started to sound irritated when his questioners kept bringing it up. Yet for many, the Eurozone is not a true monetary union if its liabilities are not shared equally."

Via Twitter

Vegetarian haggis?

Douglas Fraser

Business and economy editor, Scotland

haggis
BBC

tweets: If your job's getting you down today, you could be doing this.

Via Email

ECB stimulus plan

Ben Brettell

Senior Economist, Hargreaves Lansdown

"Will QE work? This is the sixty-four thousand euro question, but the answer is uncertain. A Bank of England study suggests QE in the UK did little to increase bank lending. However, the size of the ECB's programme, combined with its potentially open-ended nature, should convince markets that Mario Draghi is committed to fighting deflation."

ECB stimulus plan

One more nugget from Mr Draghi's press conference Q&A on inflation: "Annual HICP [Harmonised Index of Consumer Prices] inflation is expected to remain very low or negative in the months ahead. Such low inflation rates are unavoidable in the short term, given the recent very sharp fall in oil prices and assuming that no significant correction will take place in the next few months."

Via Twitter

ECB stimulus plan

Nouriel Roubini

Professor at Stern School, NYU

tweets: ECB went for a larger QE program (over 1tr euros) in exchange for low risk sharing (only 20% of bonds purchased by ECB, 80% by NCBs [national central banks]) #WEF

ECB stimulus plan

mario
Reuters

That's it from Mr Draghi. We will bring you more analysis of his bond-purchasing splurge as it arrives.

ECB stimulus plan

Mr Draghi said among ECB governing members "there was a large majority on the need to trigger it [bond buying] now, and so large that we didn't need to take a vote". Is hyperinflation a risk with bond buying, he's asked? "Have we seen lots of inflation since the QE programme started?", he asks in return. Cheap money for banks didn't cause inflation last time, he adds.

Via Email

ECB stimulus plan

Colin McLean

Managing director

"Coming later in the cycle, it is less clear if the measures will make the same impact as those in the US, UK and Japan. The US and UK were dealing with a cyclical downturn, not deep-seated structural failure. In the Eurozone, QE might further delay the need for structural reform in France, Greece and others - particularly in labour flexibility and the public sector."

ECB stimulus plan

draghi
BBC

The maturities of the bonds to be bought range from two to 30 years, says Mr Draghi. Will he buy bonds with negative yields? "Yes," says Mr Draghi. On buying Greek bonds, "there's no special rule" for Greece.

Via Email

ECB stimulus plan

Marc Ostwald

Strategist, ADM Investor Services International

"So far, the market is impressed by €60bn per month, but details are a little bit sparse, loss sharing is very limited... it's almost as though they have made this so complicated that markets cannot react! On balance this does smack of a very convoluted and complex compromise."

Via Twitter

ECB stimulus plan

Gavin Hewitt

Europe editor

tweets: 5 years into the euro zone crisis the ECB announces a €1.1 trillion quantitative easing programme to boost economy. Bolder than expected.

ECB stimulus plan

draghi
BBC

Low inflation was one of the main reasons the ECB decided to launch the bond buying programme, Mr Draghi says. The sharp fall in oil prices could have a knock-on effect on wage and price setting, he said.

Via Twitter

Joe Lynam

BBC Business Reporter

tweets: If earn in £ or $ and youre planning a cheeky weekend in Paris, Rome or Dublin etc, it's literally getting cheaper by the second

Via Email

ECB stimulus plan

John Cridland

CBI Director-General

"At the moment, flagging eurozone economies are dragging on UK and world growth. Quantitative easing will give the eurozone recovery a much needed boost, which should also have a positive economic effect in the UK. To gain maximum effect though, this action must go hand-in-hand with structural reform. France needs to work with the business community to modernise its labour rules and Germany should invest more in infrastructure."

ECB stimulus plan

Mr Draghi is being asked about the risks associated with this bond-buying spree. His programme won't buy more than 25% of any given bond issue or more than 33% of any given borrower's debt, he says.

Via Twitter

ECB press conference

Aaron Heslehurst

Presenter, World Business Report

tweets: Europe whips out the big bazooka! European Central Bank launches stimulus program. Injecting 60bln euros a month - till end of 2016!

Via Twitter

ECB press conference

ECB twitter account

ECB : Draghi: Today's measures will decisively underpin the firm anchoring of medium to long term inflation expectations

Via Twitter

ECB press conference

ECB twitter account

tweets: Draghi: Purchases until sustained adjustment in inflation path consistent with aim of inflation close to, but below 2% over the medium term

Via Twitter

ECB press conference

Michelle Fleury

BBC business correspondent, New York

tweets: Draghi on potential losses : "will be subject to loss sharing" #ECB #QE

ECB press conference

euro
BBC

The euro fell a cent against the dollar to $1.1518 as Mr Draghi announced the €60bn per month asset buying programme.

ECB press conference

draghi
BBC

Mr Draghi is now talking about the "expanded asset purchase programme." They are buying €60bn per month until the end of September 2016 or until there's a "sustained adjustment in the path of inflation" to get it close to 2%.

ECB press conference

European Central Bank chief Mario Draghi has sat down to begin his news conference. He's 7 minutes late.

Via Twitter

Ian Bremmer

Professor, NYU

Europe's youth unemployment (15-24): Greece 58% Spain 57% Italy 40% Portugal 38% France 24% UK 20% Germany 8%#wef15 #equalgrowth?

Big Macs and the eurozone

World Service

Big Mac
Getty Images

What can the price of a Big Mac tell us about Germany, Greece, the eurozone and QE? Ed McBride from the Economist

explains all to Business Daily. You can
subscribe to the podcast here too.

Via Twitter

Linda Yueh

Chief business correspondent

Renault-Nissan CEO Carlos Ghosn tells me #Brexit is bad for businesses like his & would re-consider UK investments if UK leaves EU #WEF2015

Eurozone stimulus

BBC World News

Stephanie Flanders, JP Morgan Asset Management
BBC

"It's quite a high risk moment for the ECB especially having stoked expectations around this meeting," says Stephanie Flanders from JP Morgan Asset Management and, formerly the BBC's Economics Editor, in

Davos. She thinks the important thing is that we come away from the meeting thinking "the ECB can still do its job, can pursue its inflation target".

ECB interest rates

The European Central Bank maintains its main interest rate at 0.05%. "Further measures" will be communicated at the press conference being held by ECB chief Mario Draghi at 13:30 London time, the ECB said.

Only at Davos

Sir Richard Branson and Will.i.am
Virgin

Sir Richard Branson enjoys a quiet chat with rapper, record producer and entrepreneur will.i.am at

Davos, presumably accompanied by TV crews, producers and PR people. According to Sir Richard they discussed business, tech, space, music and breakfast.