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UK and China markets dip amid further instability

Instability in the Chinese stock market continued this morning after Shanghai shares ended more than 1% down after another volatile day.

London's FTSE 100 Index also dipped by more than 1.5% in its opening minutes of trading.

It comes after China cut its interest rates yet again in a bid to boost its flagging economy. The 0.25 per cent drop was the fifth interest rate cut in China since November.

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China crisis will push interest rate rise 'further back'

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 said.

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

Speaking on BBC Radio 4's Today Programme, he said:

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.

– Lord Turner of Ecchinswell

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