China cuts lending rate as economy struggles amid Covid lockdowns

China's central bank on Monday unexpectedly cut a major interest rate in an attempt to bolster an economy that is struggling to grow amid repeated Covid lockdowns and a property downturn.

The People’s Bank of China on Monday trimmed its medium-term lending rate by 10 basis points to 2.75%. Analysts had forecast no change.

“China’s economy is suffering from ongoing Covid lockdowns and a fragile property market. Developers reported lower rates of investment into new building projects whilst sales of new homes dived by 31% in the year to end-July,” said Hargreaves Lansdown fund manager Steve Clayton.

Official data released on Monday reflected slower consumer and factory activity as the country’s economic recovery continued to be sluggish.

Retail sales rose 2.7% year on year in July against forecasts of 5% while industrial production was 3.8% higher, against expectations of 4.6%.

Reporting by Frank Prenesti at Sharecast.com