Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner. Facebook Messenger An icon of the facebook messenger app logo. Facebook An icon of a facebook f logo. Facebook Messenger An icon of the Twitter app logo. LinkedIn An icon of the LinkedIn logo. WhatsApp Messenger An icon of the Whatsapp messenger app logo. Email An icon of an mail envelope. Copy link A decentered black square over a white square.

China’s economic slowdown tipped to delay UK interest rate rise

Chinese investors monitor prices as the country's main stock market index fell for a third day.
Chinese investors monitor prices as the country's main stock market index fell for a third day.

The point at which UK interest rates begin to rise will be “put even further back” as countries around the world respond to China’s slowing economy, the former chairman of the Financial Services Authority has suggested.

Crossbench peer Lord Turner of Ecchinswell predicted the Chinese slowdown would “push back” the point where the Bank of England puts up interest rates.

The FTSE Index bounced back above the 6,000 mark after surging by nearly 2% as it recovered following one of its worst sessions in recent years.

Investors on Monday had been reacting to the latest stock market rout in China.

Lord Turner told BBC Radio 4’s Today programme: “Well I think what will happen as the inevitable consequence of the China slowdown, and the most important bit here is the very big slowdown of the economy rather than the fall in the equity prices, I think in response to that we will see that the point at which interest rates rise will be put even further back.”

Asked how far into the future was the prospect of a rate rise in Britain, he said: “I don’t know. I’m always very wary of predicting the precise point at which interest rates rise.

“But what I will say is I think we are in deeply deflationary times, I think what has happened in China was in a sense predictable and indeed predicted.”

He added: “I think the consequence of that is whenever is the first move up in interest rates, there will be very few and the rate of increase will be shallow.

“So if you were to say what will interest rates be in 2017/2018, I would be very surprised if the UK or US interest rates will be more than 2 or 2.5% even by 2018 and I think across a lot of the rest of the world, in Europe, in Japan they will effectively be zero.”

In Britain over the last six years, he said, the level of company debt and household debt had slowly begun to go down, but the increase in public debt had “more than offset that”.

He said: “The crucial thing about debt is that once we have too much of it in the economy, we really don’t know how to get rid of it rather than simply shift it around the economy.”

He added: “We do face a fundamental problem I think in the world that we piled up before 2008, primarily actually at that time on the private side, not the public side so much debt that we really don’t know how to get rid of it now.”