And finally.... Larry Elliott has the full story on Chinese premier Li’s speech to Davos tonight:

China’s premier Li Keqiang said his country would avoid a hard landing as he shrugged off concerns about his country’s slowing growth rate.

In his keynote address to the World Economic Forum, Li admitted that 2015 would be a tough year for the economy as it adjusted to a slower pace of expansion.

“China’s economy will face substantial further downward pressure in 2015”, the Chinese premier said as he insisted that there would be no deviation from the focus on structural reform and better-balanced growth.”

At present, China has entered the stage of the new normal, shifting from high speed to medium to high speed. That makes structural reform all the more necessary.”

China’s grew at 7.4% in 2014, its slowest rate in 15 years, with the annual growth rate in the fourth quarter of the year just above 6%. The slowdown is part of a deliberate strategy by Beijing to deal with the problems caused by the enormous stimulus programme introduced after the financial crisis of 2008, which saw credit expansion and large-scale investment in infrastructure.

Li said:

“A financial crisis will not happen in China and China will not head for a hard landing.”

In answer to a question from the WEF’s founder, Klaus Schwab, Li said that the easing of restrictions on the use of China’s currency, the renminbi, would continue gradually.

He added:

“Internationalisation is a long term process. China is still a developing country”.

And I think that’s all from Davos tonight. We’ll be back in the morning. Thanks for reading and commenting. GW.

Christine Lagarde also spoke, briefly, saying:

I have just received a request from president Porosheko, in the presence of his finance minister and the head of his central bank, for a new extended fund facility, or EFF, to replace the current SBA or standby arrangement.

This request I will submit to the board, which will be convened as quickly as possible in order to review the relevance of this EFF programme which I would certainly propose to support.

The EFF is for an extended period of time, so it is longer than the SBA. As a result its financing is also larger.

The existing SBA is around $17bn, and not enough to cover the damage suffered since the conflict with Russia started. Ukranian bonds have been tumbling in value in recent months, with traders concluding that it may default.

Lagarde also offered Poroshenko some support, saying:

This clearly is a demonstration of the Ukranian authorities to conduct serious long-term structural reforms in addition to also adjusting their fiscal policy to make sure the Ukranian economy is in a position to recover.

Breaking News: Ukraine is requesting an extended fund facility from the IMF, following the bilateral meeting between President Poroshenko and Christine Lagarde.

Natalia Yaresko, finance minister, and Lagarde just met the press to announce it.

Yaresko added that “We will also consult with the holders of our sovereign debt with a view to improving medium-term debt sustainability”.

More to follow!

Meanwhile some excitement ahead of the ECB meeting tomorrow, with a reported leak of what the central bank is proposing regarding quantitative easing:

Kathleen Brooks at Forex.com said:

This would disappoint the market. A €500bn one-off QE package may be considered too paltry to make a difference, especially since the Bank of Japan has committed to do more than this each year until its CPI rate rises to 2%.

We would expect a sharp knee jerk reaction lower in stocks, bond yields could also rise, which could put upward pressure on the euro in the short term. Overall, we think a QE disappointment would be a long-term negative for the euro, as it would increase pressure to take action in the coming months.

Ukraine’s President, Petro Poroshenko, is cutting short his Davos trip because of escalating violence in eastern Ukraine.

Poroshenko said Russia had sent another 2,000 troops into the region to assist pro-Russian rebels flighting Ukraine’s army.

A grave-looking Poroshenko told Bloomberg Television he will return to Ukraine to address the situation immediately after his meeting with Christine Lagarde, head of the International Monetary Fund, later today. (Ukraine is in the midst of negotiating with the IMF an extension to its financial aid package, which is dependent on more reforms.)

The situation [in eastern Ukraine] is getting worse. I should be in the country.

I am a president of peace and we are proposing to have a cease fire. We want to close the border, remove the troops, release hostages and start the political process.

We need three very important things: unity, on a global level against terrorism; solidarity with Ukraine; and democracy and freedom.

When asked whether he thought the situation could escalate to become a full-scale Russian invasion, he said it was up to Bloomberg viewers to judge whether an additional 2,000 Russian troops amounted to an invasion.

Poroshenko said that while Ukraine’s armed forces were very good, international co-ordination was needed.

Asked why he thought the fighting had escalated at this point, he replied:

I think you better ask Russia. Ukraine has not taken any single step to provoke escalation.

We are open for discussions with Russia.

AM

Tony Blair has been challenged to accept his role in creating the current religious instability in the Middle East.

A question from the floor at the religion debate at Davos asked the former PM to reflect on what happened after he decided to go into war in Iraq.

I think your decision to go there with Mr Bush is a part of the problems we have with religion,the questioner said, telling Blair that:

I think you have a great responsibility for the conflicts we have now.

Some applause from the floor.

Blair replies:

You can have a debate on whether it’s the right or wrong decision.

But I’d also point out, and I think many people in Iraqi would agree, that Saddam Hussain wasn’t exactly a force for stability, peace and prosperity for his country, and was responsible for killing many many hundreds of thousands of people.

Blair then argues that religious extremism cannot all be blamed on the second Gulf war.

He points to extremism in France, which was opposed to the Iraq intervention.

Then you see what happens in Belgium [last week] what’s the reason for that? How about Nigeria, and Mali?

He cites Libya, where there is huge instability since Gaddafi was removed...And when we didn’t intervene in Syria, we have probably the worst situation.

And Blair then returns to his point from earlier, about the role of education:

My view is, you can debate the political decisions.. but at some point we’ve got to understand.

This extremism has grown up over a long period of time, over decades. Its roots are deep within a perversion of religion, a perversion of the religion of Islam.

I totally agree. If you’re sitting in Syria and Iraq today you need immediate measures, which is why I’d personally support intervention in those situations. And you need immediate relief from the terrorism that is engulfing your life.

But even if we were to defeat those extremist groups, you’d get other extremists groups, Blair continues. And groups starting in Europe, Africa, even in the far East.

At the end you have to deal with the root problem, which is educating people to a closed-minded view of the world, that says if you’re not like me you’re my enemy.

We have got to stop making excuses for those people...and start to tackle the fundamental incubation of that problem, which lies in formal and informal education systems educating young people to hatred to those who are different.

If you don’t deal with that, then we can debate the political issues forever, but we’ll never get the the root of the problem, Blair concludes.

Back to the discussion on religion..... (live feed here)

Tony Blair is being asked how education can be used to prevent religion being used to fuel conflict

Extremism is not new – we had it in the 20th cetury, through communism and fascism, the former PM says,

Don’t forget colonialism, shoots back another panelist. Blair doesn’t argue.

Tony Blair continues to explain that an interconnected world can only work if people have a sense of at least tolerating people who are different, and ideally respecting them.

We have Jews, Christians, Muslims on this panel. If we can get on with each other, respect each other, see our diversity as a strength, the world will work better. This is obvious and clear.

When you have these acts of terrorism, with whole parts of countries being destabilised at the moment. There are certain security issues, measures you have to take....

But at the heart of it you need to defeat the ideology based on a perversion of religion.

That means that education is a security issue, Blair says, adding:

There are young people in formal and informal education who are being taught a closed view of the world, not an open one.

Across the Davos floor, the UN’s Secretary General special envoy David Nabarro said another $1bn is needed to battle Ebola and that no time frames could be put on ending the pandemic.

Jill Treanor reports:

Asked how long it would take to end the crisis, Nabarro said: “I really don’t think we can put a timescale on it will end”.

Incident levels are declining in Liberia , Sierra Leone and Guinea, he said. But the next step was to find every individual either Ebola.

In documents published today Nabarro said that the most extreme scenarios considered in October had not materialised and the number of cases has not accelerated to rate that might have been possible. A number of sessions on Ebola are being held at Davos.

The number of people out of work in the UK fell by 58,000 in the three months to November, to 1.91m.

It pushed the unemployment rate down to 5.8% - the first time below 6% since the three months to September in 2008 (just as Lehman Brothers was collapsing).

Despite the drop in the number of people out of work, the Office for National Statistics said it was the smallest fall since the third quarter of 2013, in the latest sign improvement in the jobs market is slowing.

Wages excluding bonuses increased by 1.8%, marking a rise in real pay given inflation is so low, at just 0.5% in December. The government is hoping that following six years of falling real pay, consumers will start to feel a consistent rise in real pay by the time they go to the polls in May’s general election.

This is what the Chancellor George Osborne had to say on the unemployment figures:

Today’s figures confirm what the IMF said yesterday: despite growing risks in the global economy, Britain is pulling ahead with record numbers in work, falling unemployment and wages rising significantly faster than inflation.

If we want to carry on making progress towards our goal of full employment then we must continue to work through our long term economic plan – that’s the only way to deliver economic security in an uncertain world economy.

Nicola Smith, the TUC’s head of economics, was less positive:

After years of falling living standards, today’s real earnings growth suggests that we may finally be starting to make up some of the lost ground. But at this rate of progress it will still be at least another parliament before wages are even back to where they were before the crisis. Households are still far worse off today than they were five years ago.

There are now concerning signs that young people are being left behind, with long-term youth unemployment failing to improve. Far more must be done to ensure that young people are protected from the damaging effects of long periods out of work.

With the IMF downgrading its UK growth forecast this week, it’s far from clear that this is a recovery built to last. We need stronger, sustained growth in wages and a far better balanced recovery to ensure that living standards are protected in the years ahead.

Read our full story on the figures here. AM

Italy’s prime minister has just given a big hint to the European Central Bank to announce a big new stimulus package tomorrow.

Matteo Renzi told his audience that while he certainly respects the independence of the ECB, he believes it could “help Europe give a message of a new economic direction”.*

Renzi talks about how he visited Paris this month for the march following the terror attacks, and saw evidence that Europe is not just a currency.

With the right leadership, and policies, Europe could be a place that gives the world “a message of innovation in the economics, and also in the culture and the ideas”.

He also cites the Latin aphorism Carpe diem -- Italy must seize the day.

In conclusion, Renzi insisted, the best moment for Italy isn’t yesterday, it will be tomorrow.

* - most economists expect the ECB to announce a new QE programme at Thursday’s meeting, but it’s not clear whether it will be big or comprehensive enough to give Europe enough of a boost

Italian prime minister Matteo Renzi is delivering a special address to Davos now.

He began by explaining how Italy needs a new constitution, and a new electoral system, to finally give Italy the ability to pick a leader for five years.

Renzi says:

I think we must absolutely create the conditions, so that the winner of an election is a leader for a continual period of governance.

Renzi, who took power last year, says he wants Italy to be a place of innovation for his children.

But for Italy to be an innovation lab, not a museum, we need a New Europe, he declares.

We must make our reforms first, Renzi says, because they are important for our future.

But he adds that this is also the time when European gives more stress to the importance of growth and public-private initiatives, not just the discipline of austerity.

Back in the UK, the two dissenting members of the Bank of England’s Monetary Policy Committee have dropped their call for an imminent rise in interest rates.

Martin Weale and Ian McCafferty had consistently voted for a 0.25 percentage point rise in rates every month since August. However, minutes of the January MPC meeting revealed they relented this month, and joined their seven remaining colleagues in voting for no change.

Interest rates have been on hold at 0.5% since March 2009.

The reason for their change of heart is low inflation. At just 0.5% in December, inflation is way below the Bank’s 2% target and is likely to fall further given the sharp drop in oil prices. Difficult to justify a rate rise with that backdrop.

This will increase expectations that there will be no rate rise before 2016 (and possibly later).

Here is how the Weale/McCafferty u-turn was explained in the minutes. AM

For the two members who had voted in the previous month for an increase in Bank Rate, the decision this month was finely balanced. They believed that the sharp fall in inflation to below the 2% target was probably driven largely by temporary factors and was unlikely materially to affect the behaviour of households and businesses in such a way that it became self-perpetuating.

They also noted the most recent evidence that wage growth was more buoyant than they had expected.

Nevertheless they noted the risk that low inflation might persist for longer than the temporary factors implied and concluded that this risk would be increased by an increase in Bank Rate at the current juncture.

Over in the Davos press conference room, Al Gore is appearing on a panel alongside - among others - the UK’s Lord Stern.

Gore declares:

This year is the year of climate. The UN has also elevated it to the number one priority.

All major leaders are meeting in Paris in December to agree an important new agenda, Gore says. And he repeats his earlier point, that the US and China recently agreed to climate targets, showing a new commitment to the issue.

We are now seeing movements around the world either to a carbon trading approach, or a carbon tax. Or both - something he has long favoured.

Reducing carbon emissions is absolutely crucial. Along with efforts to reduce deforestation.

The centrepiece of all these efforts are the meeting in Paris, so it’s vital to build public interest in the run-up to the deal.

Thus the Live Earth: Road to Paris initiative announced with Pharrell Williams this morning.

The unlikely combination of Pharrell Williams and Al Gore have announced what they hope to be the largest campaign ever on the planet, in the form of a second round of Live Earth concerts to promote awareness of climate change, which will take place across all seven continents – including Antarctica – on June 18, writes our music editor Michael Hann.

Speaking at the World Economic Forum in Davos, the pair were joined by producer Kevin Wall to unveil a event that aims for a global television audience of 2bn across 193 television networks.

Williams, who is the event’s creative director, did not reveal any details of who would be performing at the stadium shows, saying he was keeping surprises in store, but said:

“Instead of just having people perform, we literally are going to have humanity harmonise all at once.”

Williams recalled playing Live Earth in Rio de Janeiro in 2007, describing it as “a ball”. However, he said, “You would have pundits and comedians who didn’t understand global warming and we were often ridiculed. We wanted to do something very different this time.”

A promotional clip shown before Williams spoke offered a caption promising 100 artists in the seven shows. Each event will four to six hours.

Wall said:

“The power of music is unique, because it’s borderless, without language, Pharrell will use that power. When you combine music with a message, you can effect change.”

As covered earlier in this live blog, Al Gore had earlier given Davos attendees a rapid-fire run though the rise in greenhouse gases and the damage caused by climate change.

Gore announces that a major event will take place this year to promote the Climate Change agenda, on June 18th.

And it will be led, among others, by Pharrell Williams, who is joining him on the Davos main stage now.

Al Gore says the vision for Live Earth 2015, the Road to Paris is to have:

A billion voices with one message, to demand Climate Action now.

There will be seven events, in cities across the world (including New York City and Paris). There’ll even be a band on Antarctica.

Gore says it will be the largest event of its type ever. The aim is to get a bandwagon of public opinion rolling in the run-up to the Climate Meeting in Paris in December.

And the creative director behind the event will be Pharrell Williams, he says,

Williams is on stage now.

This is a new subject for me, but a great challenge, Pharrell Williams explains.

I think you guys know how serious the global warming thing is.

He says the event will go behind simply having people perform, but can’t say more right now.

But Williams insists that it’s a vital issue:

We are going to have humanity harmonise all at once, and I am very proud to be part of this at this moment for our species

We are a very precious species...and I think we have to continue to [live up to] this idea.

Read our full story on Live Earth 2015 here.

Here’s the takeaway pitch from Al Gore. Civilisations have failed in the past because they failed to adapt to changes. “We now have a global civilisation”

Nearly time for the first major event of the day - the debate on “What’s Next? A Climate for Action”, with Al Gore, Pharrell Williams and Kevin Wall, founder of the Live Earth organisation

You can watch it live here:

As the annual mountain powwow gets underway there are fresh accusations this morning that Davos amounts to, at best, handwringing about inequality and, at worst, a hotbed of “dangerous delusions”, my colleague Katie Allen reports.

The accusation comes from campaigners Global Justice Now, which has released a report suggesting that the number of people living in poverty in sub-Saharan Africa – that’s on less than $2 a day – has doubled to 562 million since 1981. Simultaneously, the global rich have become much richer, says the group, formerly known as the World Development Movement.

The world’s richest 300 people increased their wealth by 16% in 2013, says the report entitled “The Poor Are Getting Richer and Other Dangerous Delusions”.

Alex Scrivener, author of the report and campaigner at Global Justice Now, has some stern words for the rich and famous as they embark on their first full day of the summit:

“The world’s elite, who are gathered at their annual strategy meeting in Davos, are encouraging us to believe powerful myths to convince us that their unequal system makes the world a better place. We want to undermine those ‘dangerous delusions’ to show that their policies are fuelling inequality, poverty and destruction and we need radical change.

Poverty is about power – the majority of people can’t improve their lives when all the world’s resources are monopolised by an ultra rich few.”

The seven “dangerous delusions”, in the campaign group’s eyes are:

1. The poor are getting richer
   
2. Big business runs things better
   
3. We need to have faith in the market to solve our problems
   
4. All you need is growth
   
5. Everyone wins under free trade
   
6. Africa needs our help
   
7. Aid makes the world a fairer place

Click here to read the full report and why the authors think all seven are myths

The word at Davos this morning is that Ukraine’s president, Petro Poroshenko, is cutting his visit to WEF because of the escalating conflict in the country’s eastern regions.

I just grabbed a WEF insider, who confirmed that Poroshenko flew into Switzerland last night. He’s still expected to address WEF this afternoon, but domestic concerns mean he’ll be leaving shortly afterwards, it appears.

World leaders don’t often stay for the full four days of WEF, but Poroshenko’s move underlines the severity of the violence in Eastern Ukraine. A full-scale battle has been raging in Donetsk for days between government troops and pro-Russian separatists.