Investors love cheap money – and hate optimistic central bankers

Stock markets rally thanks to Bank of Japan interest rate cut but the signs are the global economy is still feeling fragile

It would be easy to think that the worst is over, at least for the time being. Watching world stock markets rally after the Bank of Japan cut interest rates gave a sense of relief to many in the financial community. Oil prices, which slumped to just $27 (19) a barrel a fortnight ago, stood at $34, up 40 cents on the day.

Yet the reverse is true. If anything, investors are worried that governments and central banks have failed to realise how weak the global economy still is, seven years after the crash. Dangerous levels of private debt in China, bad debts lurking in Europe's banking system, nervous consumers everywhere: it's a nuclear device that needs careful handling.

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