Why China's interest rate cut may be bad news for the world economy

When central banks feel the need to inject more economic stimulus a full six years into a recovery it is a sign of further trouble ahead

The People's Bank of China was preparing to spring a surprise while President Xi Jinping was taking a selfie with Manchester City star Sergio Aguero. On Friday, the central bank in the world's second-biggest economy cut the cost of borrowing for the sixth time in a year.

This move has implications, none of them especially cheery despite the knee-jerk increase in share prices that followed. Those investors who thought the announcement in Beijing was a big buy signal should ask themselves whether this was a sign of strength or a sign of weakness.

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