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 WASHINGTON — Concerned about waning economic growth, central banks in Europe and China announced measures Thursday to increase borrowing and spending by businesses and consumers, a response that was all the more striking because it was uncoordinated. 
  
  
  
  
  
  
  
  
  
 Three major central banks announced policy changes in the space of an hour. China’s central bank unexpectedly cut regulated bank lending rates for the second time in four weeks. The European Central Bank cut its benchmark interest rate to 0.75 percent, the lowest level in its 14-year history. And the Bank of England announced it would expand its holdings of government bonds by about 15 percent. 
  
 The Federal Reserve announced two weeks ago that it would extend its own bond-buying program until the end of the year. 
  
 The actions once again cast central bankers in the role of primary responders to the global economic malaise, aiming at the same basic goal that they have tried to hit repeatedly over the last six years: encouraging people and businesses to borrow and spend and take greater risks with their investments. 
  
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 But Europe is mired in an economic recession and a political crisis. The United States is faring somewhat better in both respects, but hardly booming. China is suffering what its government has begun to describe as a sharp economic slowdown. And policy makers have not yet succeeded in restoring public confidence that better days are coming. 
  
 The latest round of modest measures — a nibble at interest rates, a few forkfuls of bonds — are unlikely to change that record, instead stoking the debate between those demanding stronger action and those convinced that central banks have done all they should. 
  
 Reaction to the new measures was subdued. Analysts used phrases like “helpful at the margins” and “it doesn’t hurt.” European stock markets rose in an initial burst of pleasure, then receded. American stock indexes fell early, then recovered their losses. 
  
 “These are not big steps; I would not expect them to have a huge effect, but I think they move in the right direction,” said Donald Kohn, a senior fellow at the Brookings Institution who served as the Fed’s vice chairman from 2006 to 2010. “I think it’s certainly the case that monetary policy can’t cure all the world’s ills, but I think it can do some good, and the central banks of the world are doing what they can.” 
  
 The Bank for International Settlements, an umbrella group for central banks, cautioned in its annual report last month that central banks could not solve the structural problems that are plaguing Europe and impeding growth. 
  
 Indeed, it said that monetary stimulus “can buy time, but may actually make it easier to waste that time, thus possibly delaying the return to a self-sustaining recovery,” by making it easier to postpone changes in fiscal policy. 
  
 The Fed’s chairman, Ben S. Bernanke, and his European counterparts have tried repeatedly to shift the burden of economic policy making to elected officials, urging them to bolster short-term growth by addressing long-term problems like the level of public debt and the cost of social programs. But countries have made little progress on those issues, and Thursday was the latest in a lengthening series of moments in which the central bankers blinked, sighed and put just a little more sugar in the bowl. 
  
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 Advertisement Continue reading the main story 
  
 The range of actions announced Thursday highlighted how far they have wandered from the traditional tools of central banking. Policy makers increasingly are selecting among options that are theoretically powerful but largely unproved, and officials in London and Frankfurt announced contrasting choices about the best approach to improve their respective economies. 
  
 The European Central Bank announced a reduction in its benchmark interest rate to 0.75 percent from 1 percent, which was once regarded as an effective minimum. The bank’s president, Mario Draghi, said he was optimistic about the long-term benefits of steps announced last week by European leaders to bolster the euro zone. But for now, he said, economic problems continued to deepen. 
  
 "We see now a weakening basically of growth in the whole of the euro area, including the country or the countries that had not experienced that before,” Mr. Draghi said at a news conference after Thursday’s announcement. 
  
 The Bank of England, which already had reduced its benchmark interest rate to a record low of 0.5 percent in 2009 and has kept it there ever since, chose to pull on a different lever. It said Thursday in London that it would add government securities worth £50 billion ($78 billion) to its existing portfolio of £325 billion ($508 billion) in its latest effort to jolt the struggling British economy out of a double-dip recession. 
  
 The policy, often described as quantitative easing, works to lower borrowing costs by reducing the supply of debt available to investors, pushing them to accept lower interest rates and to shift money into riskier assets. 
  
 George Buckley, chief British economist at Deutsche Bank in London, said the impact of the new asset purchases could increase gross domestic product by 0.5 percentage points. “This is helpful at the margins, but the big issue is what happens to the European economy as that will be transmitted across the English Channel,” Mr. Buckley said. “Fifty billion pounds in quantitative easing is not going to solve the problems. All the Bank of England can hope to do is to offset some of the headwinds from Europe.” 
  
 The Chinese central bank has more room to maneuver than its Western counterparts, because interest rates remain relatively high, and because it can set lending rates directly, rather than exerting only indirect influence. It announced a cut in the regulated rate for one-year bank loans by 0.31 percentage points, to 6 percent. And it said banks could charge as little as 70 percent of that rate to selected customers; the minimum had stood at 90 percent until last month, when it was reduced to 80 percent. 
  
 It provided no explanation for its moves, which take effect Friday morning. But Chinese policy makers have probably received at least a rough preview of the nation’s second-quarter economic statistics scheduled for release next week. Most economists now expect those figures to show considerably weaker growth, at least compared with China’s vigorous expansion over most of the last three decades. 
  
 “This aggressive policy action reflects, in our view, a deepening concern by policy makers that the economy has yet to find a bottom,” Nick Chamie, an economist at RBC Dominion Securities, wrote in a research note. ||||| Markets dropped Thursday after a surprise rate cut from China spooked investors into worrying that the downturn in the world's second-largest economy may be bigger than they had expected. 
  
 A warning from Mario Draghi, the president of the European Central Bank, that risks remained to the economy of the 17 countries that use the euro didn't help matters. The bank's rate-setting panel had earlier unanimously decided to cut the main interest rate to a record low of 0.75 percent in an effort to stimulate growth. 
  
 The day has been dominated by central banks. The People's Bank of China cut its main lending rate by 0.31 percentage points to 6 percent and reduced its deposit rate by a quarter of a percentage point to 3 percent. It said the moves should boost growth in the second half of year but analysts said it hinted at a deepening economic concern. 
  
 Mark Williams, chief Asia economist at Capital Economics, said the move by the Chinese central bank may indicate that policymakers have had a sneak preview of June figures and "not liked what they've seen." 
  
 The Chinese authorities may have wanted to accentuate the impact of their rate cut by doing it alongside others in Europe to encourage talk of a coordinated response to the slowdown in the global economy. 
  
 "Again, though, this might simply underline the seriousness of the downside risks," said Williams. 
  
 The move overshadowed developments in Europe, which were expected by the markets. 
  
 The Bank of England, at the same time as China's central bank, approved another 50 billion pounds ($78 billion) injection into the ailing British economy. Under the so-called quantitative easing program, the Bank purchases government bonds from banks, in the hope that they will use the money to lend to businesses and consumers. The new purchases are expected to take 4 months to complete. 
  
 The ECB also delivered on market expectations by cutting its main interest rate. Investors remain skeptical, however, as to whether it will be enough to turn around the eurozone economy, which appears headed for recession. 
  
 "It is clear that market sentiment is somewhat mixed, and that news from Europe rightly continues to carry a game changing amount of weight," said Simon Furlong, a trader at Spreadex. 
  
 In Europe, Germany's DAX was 1.2 percent lower at 6,487 while the CAC-40 in France fell 1.5 percent to 3,219. The FTSE 100 index of leading British shares was 0.2 percent lower at 5,672. 
  
 The euro was hit particularly hard, falling 1.2 percent to $1.2373. 
  
 In the U.S., the Dow Jones industrial average was down 0.6 percent a 12,870 while the broader S&P 500 index fell 0.6 percent to 1,366. 
  
 Developments around the world offset some encouraging news on the U.S. jobs front in the run-up to Friday's nonfarm payrolls data, which often set the market tone for a week or two after their release. 
  
 The ADP private payrolls firm said 176,000 jobs had been created in June. That was above expectations and has raised predictions about the gain to be reported in Friday's government data. 
  
 "Take the ADP results with a handful of coarse salt as it is well-known to throw many a curveball," said Jennifer Lee, an analyst at BMO Capital Markets. "But I would love to be wrong this time." 
  
 Earlier in Asia before China's rate cut, Japan's Nikkei 225 index fell 0.3 percent to 9,079.80 and Hong Kong's Hang Seng was up 0.4 percent to 19,792.02. South Korea's Kospi slipped 0.1 percent to 1,875.49. Australia's S&P/ASX 200 dropped 0.1 percent to 4,169.20. China's Shanghai Composite tumbled 1.2 percent to 2,201.35. 
  
 Oil prices dipped alongside stocks, with benchmark oil for August delivery down 61 cents at $87.05 a barrel in electronic trading on the New York Mercantile Exchange. |||||

Write a summary.
– The European Central Bank today cut its key interest rate by a quarter-point to .75%, its lowest level yet, in a move the New York Times describes as the ECB's "most aggressive" since the eurozone crisis hit. Though the move was widely expected, it does bring the benchmark rate to what was once considered the lower bound on the official rate. The action will make it cheaper for businesses and consumers to take loans. In a second, more surprising, move, the ECB also cut by a quarter-point the interest rate it pays banks on overnight deposits, bringing that to zero and giving banks reason to lend the money, rather than sock it away with the ECB. The Times notes that the moves leave the ECB with few crisis-combating tools left. The next step would probably involve a massive bond-buying spree, which could anger Germany because it doesn't want to get stuck bearing the brunt of any losses the ECB could suffer on its bond holdings. Today's other major rate news comes from China: The AP reports the People's Bank of China cut its main lending rate by 0.31 points to 6% and reduced its deposit rate by a quarter-point to 3%, moves analysts believe hint at deepening economic concern.
Annons Fortsätt läsa huvudberättelsen WASHINGTON — Orolig över avtagande ekonomisk tillväxt, centralbanker i Europa och Kina meddelade åtgärder torsdag för att öka lån och utgifter av företag och konsumenter, ett svar som var desto mer slående eftersom det var okoordinerat. Tre större centralbanker meddelade policyändringar inom loppet av en timme. Kinas centralbank sänkte oväntat de reglerade bankernas utlåningsräntor för andra gången på fyra veckor. Europeiska centralbanken sänkte sin referensränta till 0,75 procent, den lägsta nivån i sin 14-åriga historia. Bank of England meddelade att man skulle utöka sitt innehav av statsobligationer med omkring 15 procent. Federal Reserve meddelade för två veckor sedan att man skulle förlänga sitt eget obligationsköpsprogram till slutet av året. Åtgärderna har återigen fått centralbankstjänstemännen att ta rollen som huvudaktörer i den globala ekonomiska olusten, och syftar till samma grundläggande mål som de har försökt att nå upprepade gånger under de senaste sex åren: att uppmuntra människor och företag att låna och spendera och ta större risker med sina investeringar. Foto Men Europa är fast i en ekonomisk recession och en politisk kris. Förenta staterna klarar sig något bättre i båda hänseendena, men blomstrar knappast. Kina lider av vad dess regering har börjat beskriva som en kraftig ekonomisk avmattning. Och beslutsfattarna har ännu inte lyckats återställa allmänhetens förtroende för att det kommer bättre dagar. Den senaste omgången av blygsamma åtgärder — en knuff till räntorna, några gaffeltruckar av obligationer — kommer sannolikt inte att ändra detta rekord, utan i stället driva debatten mellan dem som kräver starkare åtgärder och dem som är övertygade om att centralbankerna har gjort allt de borde. Reaktionen på de nya åtgärderna dämpades. Analytiker använde fraser som ”hjälpsamma i marginalerna” och ”det skadar inte”. De europeiska aktiemarknaderna steg i en första explosion av njutning, sedan drog sig tillbaka. Amerikanska aktieindex sjönk tidigt och återtog sedan sina förluster. — Det här är inte stora steg; jag skulle inte förvänta mig att de skulle få någon enorm effekt, men jag tror att de rör sig i rätt riktning, sade Donald Kohn, en seniorkollega vid Brookings Institution som tjänstgjorde som Fed:s vice ordförande från 2006 till 2010. – Jag tror att det verkligen är så att penningpolitiken inte kan bota alla världens sjukdomar, men jag tror att den kan göra en del nytta, och världens centralbanker gör vad de kan. Bank for International Settlements, en paraplygrupp för centralbanker, varnade i sin årsrapport förra månaden för att centralbankerna inte kunde lösa de strukturella problem som plågar Europa och hindrar tillväxten. Faktum är att penningstimulans "kan köpa tid, men kan faktiskt göra det lättare att slösa bort den tiden, vilket eventuellt försenar återgången till en självförsörjande återhämtning," genom att göra det lättare att skjuta upp förändringar i finanspolitiken. Fed:s ordförande Ben S. Bernanke och hans europeiska motsvarigheter har upprepade gånger försökt att flytta bördan av den ekonomiska politiken till valda tjänstemän och uppmanat dem att stärka den kortsiktiga tillväxten genom att ta itu med långsiktiga problem som statsskulden och kostnaderna för sociala program. Men länderna har inte gjort några större framsteg i dessa frågor, och torsdagen var den senaste i en lång rad av stunder då centralbanksmännen blinkade, suckade och lade bara lite mer socker i skålen. Foto Annons Fortsätt läsa huvudberättelsen Annons Fortsätt läsa huvudberättelsen Utbudet av åtgärder meddelade torsdag belyste hur långt de har vandrat från de traditionella verktygen i centralbank. Beslutsfattarna väljer i allt högre grad bland alternativ som är teoretiskt kraftfulla men i stort sett obevisade, och tjänstemän i London och Frankfurt meddelade kontrasterande val om det bästa sättet att förbättra sina respektive ekonomier. Europeiska centralbanken tillkännagav en sänkning av sin referensränta till 0,75 procent från 1 procent, vilket en gång betraktades som ett effektivt minimum. Bankens ordförande Mario Draghi sade att han var optimistisk om de långsiktiga fördelarna med de åtgärder som EU:s ledare tillkännagav förra veckan för att stärka euroområdet. Men just nu, sade han, fortsatte de ekonomiska problemen att fördjupas. "Vi ser nu en försvagning av tillväxten i hela euroområdet, inklusive det land eller de länder som inte hade upplevt det tidigare," sade Draghi på en nyhetskonferens efter torsdagens tillkännagivande. Bank of England, som redan hade sänkt sin referensränta till rekordlåga 0,5 procent 2009 och har hållit kvar den där sedan dess, valde att dra på en annan spak. Den sade torsdag i London att den skulle lägga statliga värdepapper till ett värde av 50 miljarder pund (78 miljarder dollar) till sin befintliga portfölj på £ 325 miljarder ($ 508 miljarder) i sin senaste ansträngning att skaka den kämpande brittiska ekonomin ur en dubbel-dip recession. Politiken, som ofta beskrivs som kvantitativ lättnader, verkar för att sänka lånekostnaderna genom att minska tillgången på skulder tillgängliga för investerare, driva dem att acceptera lägre räntor och överföra pengar till mer riskfyllda tillgångar. George Buckley, chefsekonom på Deutsche Bank i London, sade att effekten av de nya tillgångsköpen kunde öka bruttonationalprodukten med 0,5 procentenheter. “Detta är till hjälp i marginalen, men den stora frågan är vad som händer med den europeiska ekonomin som kommer att överföras över Engelska kanalen,” Mr Buckley sade. ”Femtio miljarder pund i kvantitativa lättnader kommer inte att lösa problemen. Allt Bank of England kan hoppas på att göra är att kompensera några av motvindarna från Europa. "Den kinesiska centralbanken har mer utrymme att manövrera än sina västerländska motsvarigheter, eftersom räntorna förblir relativt höga, och eftersom den kan sätta utlåningsräntor direkt, snarare än att utöva endast indirekt inflytande. Man meddelade en sänkning av den reglerade räntan för ettåriga banklån med 0,31 procentenheter, till 6 procent. Och det sade att banker kunde ta ut så lite som 70 procent av den räntan till utvalda kunder; minimibeloppet hade legat på 90 procent fram till förra månaden, då det sänktes till 80 procent. Den gav ingen förklaring till sina drag, som får verkan fredag morgon. Men kinesiska beslutsfattare har förmodligen fått åtminstone en grov förhandsvisning av nationens andra kvartalet ekonomisk statistik planerad för release nästa vecka. De flesta ekonomer förväntar sig nu att dessa siffror ska uppvisa en betydligt svagare tillväxt, åtminstone jämfört med Kinas kraftiga expansion under större delen av de senaste tre decennierna. “Denna aggressiva politiska åtgärder återspeglar, enligt vår uppfattning, en djupare oro från beslutsfattare som ekonomin har ännu inte hittat en botten,” Nick Chamie, en ekonom på RBC Dominion Securities, skrev i en forskningsnot. Marknaderna sjönk torsdagen efter en överraskningstakt från Kina skrämde investerare till att oroa sig för att nedgången i världens näst största ekonomi kan vara större än de hade förväntat sig. En varning från Mario Draghi, Europeiska centralbankens ordförande, om att riskerna för ekonomin i de 17 länder som använder euron inte hjälpte. Bankens räntesättningspanel hade tidigare enhälligt beslutat att sänka huvudräntan till rekordlågt 0,75 procent i ett försök att stimulera tillväxten. Dagen har dominerats av centralbanker. Folkets Bank of China sänkte sin huvudsakliga utlåningsränta med 0,31 procentenheter till 6 procent och minskade sin inlåningsränta med en fjärdedels procentenhet till 3 procent. Det sade att åtgärderna bör öka tillväxten under andra halvåret, men analytiker sade att det antydde en fördjupad ekonomisk oro. Mark Williams, chefsekonom i Asien vid Capital Economics, sade att den kinesiska centralbankens drag kan tyda på att politiska beslutsfattare har haft en smygvisning av junisiffror och "inte gillade vad de har sett." De kinesiska myndigheterna kan ha velat förstärka effekten av deras sänkning genom att göra det tillsammans med andra i Europa för att uppmuntra till att tala om ett samordnat svar på den avtagande världsekonomin. "Återigen kan detta dock helt enkelt understryka allvaret i de negativa riskerna", sade Williams. Utvecklingen överskuggade utvecklingen i Europa, vilket förväntades av marknaderna. Bank of England godkände samtidigt med Kinas centralbank ytterligare 50 miljarder pund (78 miljarder dollar) injektion i den sjuka brittiska ekonomin. Under det så kallade kvantitativa lättnadersprogrammet köper banken statsobligationer från banker, i hopp om att de kommer att använda pengarna för att låna ut till företag och konsumenter. De nya köpen förväntas ta 4 månader att slutföra. ECB har också uppfyllt marknadens förväntningar genom att sänka sin huvudsakliga ränta. Investerarna är dock fortfarande skeptiska till om det kommer att räcka att vända på euroområdets ekonomi, som verkar vara på väg mot recession. "Det är tydligt att marknadskänslan är något blandad, och att nyheter från Europa med rätta fortsätter att bära ett spel som ändrar vikt", sade Simon Furlong, en handlare på Spreadex. I Europa var Tysklands DAX 1,2 procent lägre vid 6.487 medan CAC-40 i Frankrike sjönk 1,5 procent till 3.219. FTSE 100-indexet för ledande brittiska aktier var 0,2 procent lägre på 5 672. Euron drabbades särskilt hårt och sjönk 1,2 procent till 1,2373 dollar. I USA var Dow Jones industrigenomsnitt nere 0,6 procent en 12 870 medan det bredare S&P 500-indexet sjönk 0,6 procent till 1 366. Utvecklingen runt om i världen kompenserade några uppmuntrande nyheter på den amerikanska jobb front inför fredagens icke-jordbruk löneuppgifter, som ofta satte marknadstonen för en vecka eller två efter deras utgivning. ADP:s privata lönefirma sade att 176 000 arbetstillfällen hade skapats i juni. Detta var över förväntan och har höjt förutsägelser om den vinst som ska rapporteras i fredagens regeringsdata. "Ta ADP resultat med en handfull grov salt som det är välkänt att kasta många en curveball," sade Jennifer Lee, en analytiker på BMO Capital Markets. "Men jag skulle älska att ha fel den här gången." Tidigare i Asien före Kinas kurssänkning sjönk Japans Nikkei 225 index med 0,3 procent till 9,079,80 och Hongkongs Hang Seng var uppe 0,4 procent till 19,792,02. Sydkoreas Kospi gled 0,1 procent till 1 875,49. Australiens S&P/ASX 200 sjönk 0,1 procent till 4 169,20. Kinas Shanghai Composite tumlade 1,2 procent till 2.201.35. Oljepriser doppas vid sidan av lager, med riktmärke olja för augusti leverans ner 61 cent på $ 87,05 ett fat i elektronisk handel på New York Mercantile Exchange. Skriv en sammanfattning.
Advertisement Continue reading the main story WASHINGTON — Worried about declining economic growth, central banks in Europe and China announced measures Thursday to increase loans and spending by businesses and consumers, a response that was all the more striking because it was uncoordinated. Three major central banks announced policy changes within an hour. The Central Bank of China unexpectedly reduced the lending rates of regulated banks for the second time in four weeks. The European Central Bank reduced its reference rate to 0.75%, the lowest level in its 14-year history. The Bank of England announced that it would increase its holdings of government bonds by about 15 percent. The Federal Reserve announced two weeks ago that it would extend its own bond purchase program until the end of the year. The measures have once again led central bank officials to take the role of key players in global economic dissipation, and aim at the same basic objectives that they have tried to achieve repeatedly over the last six years: to encourage people and businesses to borrow and spend and take greater risks with their investments. Photo But Europe is stuck in an economic recession and a political crisis. The United States is doing better in both respects, but is hardly flourishing. China is suffering from what its government has begun to describe as a sharp economic slowdown. And decision-makers have not yet succeeded in restoring public confidence that better days will come. The latest round of modest measures — a push to interest rates, some forklifts of bonds — is unlikely to change this record, but instead push the debate between those who demand stronger action and those who are convinced that central banks have done everything they should. The reaction to the new measures was subdued. Analysts used phrases such as ‘helpful in margins’ and ‘it does not harm’. European stock markets rose in a first explosion of pleasure, then withdrew. American stock indices fell early and then recanted their losses. ‘These aren’t big steps; I wouldn’t expect them to have a huge effect, but I think they’re moving in the right direction,’ said Donald Kohn, a senior fellow at Brookings Institution who served as the Fed’s vice-president from 2006 to 2010. “I believe that monetary policy cannot cure all the world’s diseases, but I think it can do some good, and the world’s central banks are doing what they can. Bank for International Settlements, an umbrella group for central banks, warned in its annual report last month that central banks could not solve the structural problems that plague Europe and hinder growth. The fact is that the money stimulus "can buy time, but can actually make it easier to waste that time, possibly delaying the return to a self-sufficient recovery," by making it easier to postpone changes in fiscal policy. Fed President Ben S. Bernanke and his European counterparts have repeatedly tried to shift the burden of economic policy to elected officials and urged them to strengthen short-term growth by addressing long-term problems such as public debt and the costs of social programmes. But the countries have made little progress on these issues, and Thursday was the latest in a long series of moments when the central bankers blinked, sighed and just put a little more sugar in the bowl. Photo Advertisement Continue reading the main story Advertisement Continue reading the main story The range of actions announced Thursday highlighted how far they have walked from the traditional tools of the central bank. Decision-makers are increasingly choosing among options that are theoretically powerful but largely unproven, and officials in London and Frankfurt announced contrasting choices about the best way to improve their respective economies. The European Central Bank announced a reduction in its reference rate to 0.75% from 1%, which was once considered an effective minimum. Bank President Mario Draghi said he was optimistic about the long-term benefits of the measures announced by EU leaders last week to strengthen the euro area. But right now, he said, economic problems continued to deepen. "We are now seeing a weakening of growth throughout the euro area, including the country or countries that had not experienced it before," said Draghi at a news conference following Thursday's announcement. The Bank of England, which had already reduced its reference rate to a record low 0.5 percent in 2009 and has kept it there ever since, chose to pull on another lever. It said Thursday in London that it would add government securities worth £50 billion ($78 billion) to its existing portfolio of £325 billion ($508 billion) in its recent effort to shake the struggling British economy out of a double-dip recession. The policy, often described as quantitative relief, works to reduce loan costs by reducing the availability of debt available to investors, pushing them to accept lower interest rates and transferring money to more risky assets. George Buckley, chief economist at the Deutsche Bank in London, said that the impact of the new asset purchases could increase gross domestic product by 0.5 percentage points. “This is helpful in the margin, but the big question is what is happening to the European economy that will be transferred across the English Channel,” Mr Buckley said. "Finally £5 billion in quantitative relief will not solve the problems. All the Bank of England can hope to do is compensate some of the headwinds from Europe. "The Chinese Central Bank has more room to manoeuvre than its Western counterparts, because interest rates remain relatively high, and because it can set lending rates directly, rather than exert only indirect influence. It announced a reduction in the regulated interest rate for one-year bank loans by 0.31 percentage points, to 6%. And it said banks could charge as little as 70 percent of that interest to selected customers; the minimum amount had been 90 percent until last month, when it was reduced to 80 percent. It gave no explanation for its features, which take effect Friday morning. But Chinese decision-makers have probably received at least a rough preview of the nation's second quarter economic statistics scheduled for release next week. Most economists now expect these figures to show significantly weaker growth, at least compared to China's strong expansion over most of the past three decades. “This aggressive policy action reflects, in our view, a deeper concern from decision-makers that the economy has not yet found a bottom,” Nick Chamie, an economist at RBC Dominion Securities, wrote in a research note. The markets dropped on Thursday after a surprise pace from China scared investors to worry that the decline in the world's second largest economy may be greater than they had expected. A warning from Mr Draghi, President of the European Central Bank, that the risks to the economy of the 17 countries using the euro did not help. The bank's interest rate setting panel had previously unanimously decided to lower the main interest rate to a record low 0.75% in an effort to stimulate growth. The day has been dominated by central banks. The Bank of China of the People reduced its main lending rate by 0.31 percentage points to 6 per cent and reduced its deposit rate by one quarter of a percentage point to 3 per cent. It said that the measures should increase growth in the second half of the year, but analysts said that it indicated a deepening economic concern. Mark Williams, chief economist in Asia at Capital Economics, said that the Chinese Central Bank's move may indicate that political decision-makers have had a sneak preview of June figures and "did not like what they have seen." The Chinese authorities may have wished to reinforce the impact of their reduction by doing so with others in Europe to encourage talk about a coordinated response to the declining world economy. "Once again, however, this can simply underscore the seriousness of the negative risks," Williams said. Developments overshadowed developments in Europe, as expected by markets. The Bank of England approved, at the same time as China's central bank, an additional £50 billion ($78 billion) injection into the sick British economy. Under the so-called quantitative facilitation programme, the bank buys government bonds from banks, hoping that they will use the money to lend to businesses and consumers. The new purchases are expected to take 4 months to complete. The ECB has also met market expectations by reducing its main interest rate. However, investors remain sceptical as to whether it will be enough to turn the euro area economy, which appears to be heading for recession. "It is clear that the market feeling is somewhat mixed, and that news from Europe rightly continues to carry a game that changes weight," said Simon Furlong, a trader on Spreadex. In Europe, Germany's DAX was 1.2 percent lower by 6.487 while in France the CAC-40 fell 1.5 percent to 3.219. The FTSE 100 index for leading UK shares was 0.2 percent lower at 5,672. The euro was hit particularly hard and fell 1.2 percent to 1.2373 dollars. In the United States, Dow Jones' industrial average was down 0.6 percent a 12,870 while the wider S&P 500 index dropped 0.6 percent to 1,366. Developments around the world compensated some encouraging news on the U.S. job front for Friday's non-agricultural wage data, which often set the market tone for a week or two after their release. ADP's private payroll firm said 176,000 jobs had been created in June. This was above expectations and has raised predictions of the profit to be reported in Friday's government data. "Take ADP results with a handful of rough salt as it is well known to throw many a curveball," said Jennifer Lee, an analyst at BMO Capital Markets. "But I'd love to be wrong this time." Earlier in Asia before China's price drop, Japan's Nikkei 225 index dropped by 0.3 percent to 9,079.80 and Hong Kong's Hang Seng was up 0.4 percent to 19.792.02. South Korea's Kospi slid 0.1 percent to 1,875.49. Australia's S&P/ASX 200 dropped 0.1 percent to 4,169.20. China's Shanghai Composite tumbled 1.2 percent to 2,201.35. Oil prices are dipped alongside stocks, with benchmark oil for August delivery down 61 cents at $87.05 a barrel in electronic commerce on the New York Mercantile Exchange. Write a summary.
– Europeiska centralbanken sänkte i dag sin nyckelränta med en fjärdedels procent till ,75 procent, den lägsta nivån hittills, i ett drag beskriver New York Times som ECB:s "mest aggressiva" sedan krisen i euroområdet drabbade. Även om flytten var allmänt förväntad, ger den riktvärdet till vad som en gång ansågs vara den lägre gränsen på den officiella skattesatsen. Åtgärden kommer att göra det billigare för företag och konsumenter att ta lån. I en andra, mer överraskande rörelse, sänker ECB också med en fjärdedels procent den ränta som den betalar till bankerna på inlåning över natten, vilket gör att den blir noll och ger bankerna anledning att låna ut pengarna, i stället för att stoppa undan dem med ECB. Times konstaterar att det finns få verktyg kvar för att bekämpa kriser i ECB:s verksamhet. Nästa steg skulle förmodligen innebära en massiv obligationsköpsspree, vilket skulle kunna göra Tyskland argt eftersom det inte vill fastna i de stora förluster som ECB skulle kunna drabbas av på sina obligationsinnehav. Dagens andra stora räntenyheter kommer från Kina: AP rapporterar att People's Bank of China sänkte sin huvudsakliga utlåningsränta med 0,31 poäng till 6% och sänkte sin inlåningsränta med en kvartspunkt till 3%, flyttar analytiker tror antyda att fördjupa ekonomisk oro.
The European Central Bank today reduced its key interest rate by one quarter to .75 %, the lowest level so far, in one move describes the ECB's "most aggressive" since the crisis in the euro area. Although the move was generally expected, it provides the benchmark value to what was once considered the lower limit of the official tax rate. The measure will make it cheaper for businesses and consumers to take out loans. In a second, more surprising movement, the ECB is also reducing by a quarter the interest rate it pays to banks on overnight deposits, which makes it zero and gives banks the opportunity to lend the money, instead of putting it away with the ECB. The Times notes that there are few tools left to combat crises in the ECB's operations. The next step would probably mean a massive bond purchase pree, which could make Germany angry because it does not want to get caught up in the heavy losses that the ECB could suffer on its bond holdings. Today's second major interest rate news comes from China: AP reports that People's Bank of China lowered its main lending rate by 0.31 points to 6% and lowered its deposit rate by a quarter point to 3%, moving analysts believe to imply deepening economic concerns.