European markets are downbeat following the U.S. Federal Reserve’s decision to keep interest rates on hold. As Kirsty Basset reports, the decision is causing concern about the state of the global economy.
Uncertainty weighed down European stock markets on Friday, after the U.S Federal Reserve left rates unchanged at zero. The decision, based on weakening global growth and market volatility is fuelling concern about the health of the global economy. IDEAglobal's Adrian Schmidt. (SOUNDBITE)(ENGLISH) SENIOR POLICY ECONOMIST/FX STRATEGIST AT IDEAGLOBAL, ADRIAN SCHMIDT SAYING: "I think there is some concern that maybe the Fed knows something that we don't know. Maybe the Fed are a bit more worried than they're letting on. Or maybe the lack of a move indicates they're worried. That's understandable although I suspect there isn't any private information here. I think it's as I say a reflection of uncertainty." Yellen explicitly mentioned the central bank was focusing on the slowdown in China and emerging markets. (SOUNDBITE) (English) SENIOR POLICY ECONOMIST/FX STRATEGIST, IDEAGLOBAL, ADRIAN SCHMIDT, SAYING: "Certainly China would have come into their thinking though Yellen slightly played down China in her comments. As she said, she's been aware and everyone's been aware that China's been slowing for some time and will probably continue to slow." Some welcomed the news - emerging market stocks and currencies rose across the board. But investors are back to guessing when the tightening might begin. (SOUNDBITE) (ENGLISH) SENIOR POLICY ECONOMIST/FX STRATEGIST AT IDEAGLOBAL, ADRIAN SCHMIDT SAYING: "It's a close call. We're still looking for December but it is a close call." Separately, Andy Haldane, chief economist at the Bank of England, said its next move might be a cut rather than a hike, if inflation remains low, and if problems in emerging markets persist.