China interest rate cut fuels fears over ailing economy

European markets rise as investors welcome boost from cheaper credit in China and prospects for further delay to Federal Reserve rate hike in US

China fuelled fears that its ailing economy is about to slow further after Beijing cut its main interest rate by 0.25 percentage points.

The unexpected rate cut, the sixth since November last year, reduced the main bank base rate to 4.35%. The one-year deposit rate will fall to 1.5% from 1.75%.

Related: Five reasons to be worried about the Chinese economy