According to the Telegraph, the Bank of England may have to cut interest rates if Chinese policymakers fail to engineer a soft landing for the world’s second largest economy.
Source: Chinese ‘hard landing’ would force Bank of England to slash interest rates – Telegraph
It’s pretty obvious that if there is a major risk to global growth, then powerful combined international intervention is required. This is exactly what happened following the financial disaster in 2008.
It has also been clear all week that risks in China are likely to delay decisions to raise interest rates. So it’s implicit that the greater the fallout in China then the greater the global reaction.
Personally, I feel that the fears of a China ‘hard-landing’ have been overplayed. Most experts have identified that China has massive economic firepower to deploy and is ready to use it.
Sadly, I feel that this Telegraph article is yet another example of ‘me too journalism’.