Central banks in Europe and Asia attempted to stimulate the sluggish global economy

Central banks in Europe and Asia attempted to stimulate the sluggish global economy on Thursday by loosening monetary policy and cutting interest rates.

 

The People’s Bank of China surprised investors by lowering its main one-year lending rate by 0.31 percentage points to 6 per cent, showing that the economic slowdown extends beyond Europe. 

 

As expected, the European Central Bank cut its main interest rate by a quarter point to 0.75 per cent, the lowest on record, and the Bank of England restarted money-printing and pumped an extra £50bn into the UK economy, taking the total to £375bn. 

 

The central banks’ moves come as global business surveys show much weaker growth than expected this year. The global composite purchasing managers’ index of activity in services and manufacturing, compiled by JP Morgan, dropped to 50.3 in July, its lowest since 2009.