In the span of less than an hour Thursday, China’s central bank and the European Central Bank cut interest rates and the Bank of England stepped up its economic stimulus program.
While the moves were not coordinated, they emphasize the concern financial officials have about a global economic slowdown and highlight the role central banks are playing in seeking to bolster growth.
China’s central bank unexpectedly cut regulated bank lending rates by nearly a third of a percentage point and made a rule change that could reduce borrowing rates for companies with good credit by an additional three-fifths of a percentage point.
Just four weeks earlier, the central bank, the People’s Bank of China, announced a similar rate reduction and rule change. The moves underline the growing worries in Beijing about what the government has begun to describe as a sharp economic slowdown.
In Frankfurt, Germany, the ECB cut its benchmark interest rate to its lowest level in what may be its most aggressive move yet to unblock the flow of credit and prevent further deterioration of the eurozone crisis.
Most analysts expected a cut, but its scale appeared to disappoint investors looking for a more aggressive move. The major stock indexes in France, Germany and Italy fell sharply after the move.
The ECB cut its benchmark rate to 0.75 percent from 1 percent, which was once regarded as the lower bound on the official rate. With interest rates now close to zero, the bank and its president, Mario Draghi, will have a dwindling selection of conventional monetary policy tools they can use to combat the crisis.
In London, the Bank of England stepped up its economic stimulus, announcing an increased bond-buying program intended to jolt the struggling British economy out of a double-dip recession.
The central bank left Britain’s benchmark interest rate unchanged at a record low of 0.5 percent, apparently concluding that quantitative easing, which involves buying government bonds to increase available capital, was a more effective measure to lift the economy.
In Beijing, the central bank reduced the regulated rate for one-year bank loans by 0.31 percentage points, to 6 percent.
At the same time, it said banks would be allowed to charge as little as 70 percent of the regulated interest rate to good customers; the previous minimum, set a month ago, had been 80 percent. And until the initial rule change early last month, banks had been required to charge at least 90 percent of the regulated rate, even to their best customers.
On Thursday, the central bank also lowered the regulated minimum interest rate that banks must pay depositors. But the reduction in deposit rates was smaller, a quarter of a percentage point.
The smaller change in deposit rates is the latest sign that Chinese banks have found themselves lately in the unfamiliar position of struggling to persuade Chinese households and companies to deposit more money. A variety of trusts and other investment vehicles have become popular in China as savers have begun to rebel at very low regulated deposit rates, which will fall to a minimum of 3 percent for one-year certificates of deposit with the changes announced Thursday.
China’s central bank provided no explanation for its moves, which take effect Friday. But the initial reaction of private sector economists was that the rate cuts represented a signal of genuine worry by Chinese decision-makers.
‘'This aggressive policy action reflects, in our view, a deepening concern by policymakers that the economy has yet to find a bottom and requires additional stimulative monetary settings to engineer a recovery,’’ Nick Chamie, an economist at RBC Dominion Securities, wrote in a research note.