China cuts interest rates; FTSE rebounds 3%

FTSE recovers losses as Shanghai index falls another 7.6%

The People's Bank of China (PBOC) has cut the country's benchmark interest rates, after the Shanghai index fell a further 7.6%.

China's one year savings and lending rates were each cut by 25 bps, to 1.75% and 4.6%, respectively. The reserve requirement ratio was also dropped by 50 bps, with effect from 6 September. In a statement, PBOC said the cut would help them "continue to play a good role in guiding the benchmark interest rate, reducing the social cost of financing to promote and support the sustainable and healthy development of the real economy." Meanwhile, European markets have recovered some of yesterday's losses on Tuesday. The FTSE 100 index rose 3.2% during morning trading, following a day of br...