The Reserve Bank of Australia (RBA) has today elected to cut interest rates by one quarter of a percentage point to 4.5% in a bid to bolster growth.

The move, which was widely expected, comes as the global economy slows and unemployment rises (currently at 5.2%).

It was the first time in two-and-a-half years that the RBA has cut rates.

The Australian economy, dubbed the “wonder from down under” was one of the few not to have fallen into recession like its counterparts throughout the world as it has benefited from an increase in commodity prices, while exports have received a boost due to demand from China for its iron ore and other raw materials.

However, flood and cyclone disasters, which hit earlier this year, led to a fall in coal and agricultural exports and resulted in the economy contracting in the first quarter – the largest contraction since 1991.

Furthermore, other areas of the economy, in particular retail sales, have suffered a sharp slowdown over recent months,

Meanwhile, in a statement today, the RBA said: “Information about the Australian economy suggests moderate growth overall.”

The bank added: “In other sectors, cautious behaviour by households and the high exchange rate have had a noticeable dampening effect.”

However, the high exchange rate has meant inflation has remained under control – unlike many other economies, particularly in Asia, which are suffering from stubbornly high inflation.

The RBA expects inflation to stay within its target range of 2% – 3% in 2012 and 2013.

The central bank warned that the euro zone’s sovereign debt crisis may continue to affect Australian businesses and households, despite the rescue plan agreed by European leaders last week.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit manufacturing purchasing managers’ index (PMI) has today revealed UK manufacturing activity contracted last month.

The closely-watched CIPS/Markit manufacturing PMI sank to 47.4 in October from September’s reading of 50.8.

Today’s survey means the index has fallen below the crucial 50 mark – which separates growth from expansion.

Furthermore, the index is now at its lowest level since June 2009 – when the economy was still in recession – and suggests a weak start to the final quarter of 2011.

Chris Williamson, chief economist at Markit, said there is a “significant risk” of the economy contracting in the fourth quarter and this follows similar observations made last week by Martin Weale and Paul Fisher, who are both members of the Bank of England’s Monetary Policy Committee.

The manufacturing sector accounts for around 13% of economic output.

Construction activity and service sector activity figures will be published later this week.

In other news today, the Office for National Statistics (ONS) revealed the UK economy expanded by a better-than-expected 0.5% in the July to September period.

This compares with a 0.1% growth rate for the second quarter and was better than the 0.3% expected by most economists.

The better performance was attributed to production sector output, which rose 0.5% in the three month period, versus a 1.2% decline in the previous quarter.

Meanwhile, business services and finance were the biggest contributor to overall growth in the period, expanding by 0.8%, the Office for National Statistics said.

However, the better than expected figures should not be regarded as an economic rebound since it compares with a second quarter which was hit by “special factors” such as the Royal Wedding and Japanese tsunami which trimmed as much as 0.5 percentage points from quarterly growth, analysts’ said.

Analysts also point out that the third quarter growth was still weak, at just 0.5%, and the outlook remains bleak.

The Office for National Statistics (ONS) has today revealed the UK economy expanded by a better-than-expected 0.5% in the July to September period.

This compares with a 0.1% growth rate for the second quarter and was better than the 0.3% expected by most economists.

The better performance was attributed to production sector output, which rose 0.5% in the three month period, versus a 1.2% decline in the previous quarter.

Meanwhile, business services and finance were the biggest contributor to overall growth in the period, expanding by 0.8%, the Office for National Statistics said.

However, the better than expected figures should not be regarded as an economic rebound since it compares with a second quarter which was hit by “special factors” such as the Royal Wedding and Japanese tsunami which trimmed as much as 0.5 percentage points from quarterly growth, analysts’ said.

Analysts also point out that the third quarter growth was still weak, at just 0.5%, and the outlook remains bleak.

Meanwhile, Chancellor of the Exchequer George Osborne described the figures as “a positive step” but added that the British economy still has a “difficult journey”.

In other news today, the Markit Purchasing Managers’ Index (PMI) revealed manufacturing activity contracted in October with the index falling to 47.4 in October from a reading of 50.8 the previous month.

The index is at the lowest level since June 2009 and suggests a weak start to the final quarter of 2011.

As a result, the latest PMI figures suggest the economy is still struggling and the Chancellor admitted that the euro zone debt crisis remains a concern.

Chris Williamson, chief economist at Markit, said there is a “significant risk” of the economy contracting in the fourth quarter and this follows similar observations made last week by Martin Weale and Paul Fisher, who are both members of the Bank of England’s Monetary Policy Committee.

The International Labour Organization (ILO) has warned that the world economy is heading towards a new jobs recession, which could trigger social unrest in some countries.

The recent slowdown in the global economy is “dramatically” affecting labour markets and it is expected to take at least five years for employment in developed economies to return to pre-crisis levels, according to its “World of Work Report 2011: Making Markets Work for Jobs”.

Raymond Torres, director of the ILO International Institute for Labour Studies, said in a statement: “We have reached the moment of truth. We have a brief window of opportunity to avoid a major double-dip in employment.”

Separately, the Organisation for Economic Co-operation and Development (OECD) is urging G20 leaders to take “bold decisions” when it meets for a summit in Cannes later this week, in order to avoid recession.

The OECD’s comment comes as it is forecasting a sharp slowdown in growth in the euro zone, while warning that some nations in the 17-member bloc could face negative growth.

The OECD is predicting growth of 1.6% in the euro zone this year, with a sharp slowdown to 0.3% in 2012.

This is much lower than the 2% growth it predicted for both years in May.

It is also predicting very weak growth in the UK – many economists have already slashed growth for the UK.

In the meantime, the OECD has revised growth for the US (the world’s largest economy) to 1.7% this year, down from an earlier estimate of 2.6%.

The Organisation is urging G20 leaders to act quickly to restore confidence “and to implement appropriate policies to restore longer-term fiscal sustainability.”

Official figures have revealed consumer spending in the US improved last month.

According to the Commerce Department, consumer spending rose 0.6% to $68.7 billion (£42.7 billion) in September and follows a 0.2% rise in August.

The figures will be a welcome boost for the economy which looked set to be heading towards a double dip recession just a few weeks ago.

Consumer spending is closely monitored as it accounts for more than two-thirds of economic output.

However, personal incomes rose just 0.1% in the month after a 0.1% gain in August, the Commerce Department said.

Income growth is being limited by stubbornly high unemployment, with a jobless rate that has been above the 9% mark for five consecutive months.

The figures come just a few days after the Commerce Department revealed the world’s largest economy expanded at its fastest pace in a year in the three months to the end of September.

The US economy grew at an annualised rate of 2.5% in the third quarter of this year, which was in line with forecasts but was a considerable improvement on the 1.3% growth reported for the second quarter.

However, despite both sets of encouraging figures, it appears that consumers are still wary about the future direction of the economy.

Last week, the Conference Board revealed US consumer confidence slumped in October.

The closely-monitored Consumer Confidence Index from the Conference Board dived to 39.8 this month from September’s reading of 46.4.

Not only was the reading less than forecasts of a level of 46.0, it was the lowest since March 2009, when the US was in recession.

The economic recovery in the US has so far been sluggish in the face of rising unemployment and a depressed housing market.

The Reserve Bank of India (RBI) has today raised key interest rates for the thirteenth time since March 2010, in a bid to tame stubbornly high inflation.

The central bank lifted its main rate to 8.5% from 8.25% as inflation soars on the back of higher food and fuel prices and the measures were widely expected.

Figures recently revealed India’s wholesale price inflation rose to 9.72% last month on an annual basis – significantly above the central bank’s target of between 4% and 5%.

This represented the tenth consecutive month that inflation has been above the 9% mark.

Inflation reached a two-year high earlier this year of 10.16%, after food, fuel prices and manufactured goods surged – the highest among the Group of 20 leading nations.

Annual food inflation has surged, causing major problems for the 450 million people who live below the poverty line in the country.

However, economists say that the RBI has a difficult task to bring inflation down amid signs of slowing growth.

Prime Minister Manmohan Singh has previously said inflation is a “serious threat” to the country’s growth.

It is currently the world’s second fastest-growing major economy, behind China. However, the central bank has slashed its growth forecast from 8% to 7.6% for the fiscal year that ends next March.

In a statement, the RBI said: “Slower global growth will have an adverse impact on domestic growth, particularly on industrial production, given the rising inter-linkages of the Indian economy with the global economy.”

In the meantime, the RBI warned that inflation will remain high in the short-term.

“Inflation is broad-based and above the comfort level of the Reserve Bank. Further, these levels are expected to persist for two more months,” the bank added.

Inflationary pressures are rife throughout the world, particularly in Asia, and many central banks are hiking interest rates in order to tame inflation.

The German Government has today slashed its growth forecasts for the euro zone’s largest economy.

The Government said it now expected the economy to expand by 1% in 2012, down from an earlier estimate of 1.8%.

Meanwhile, this year’s forecast has been lowered slightly to 2.9% from 3%.

Its downgrade comes just a week after Germany’s leading economic institutes cut their growth forecasts for the economy from 2% next year to 0.8%, citing the debt problems in the euro zone.

Both sets of figures will raise questions about the recovery in the euro zone as slow growth in Germany makes it more difficult for the rest of the region to avoid a double dip recession.

Last year, Germany posted growth of 3.6% – the strongest pace since reunification in 1990, according to the Federal Statistical Office.

However, a recent slew of weak economic data has forced many to re-evaluate their assessment of the economy.

The Washington-based International Monetary Fund recently lowered its growth forecasts for both Germany and the euro zone this year and next, as a result of the debt crisis.

Returning to the Government’s forecast, it said its revision was due to the expectation that demand for exports will be lower.

Economy Minister Philipp Roesler, comments: “The pace of expansion has slowed down, as we expected,” adding however that “our economy remains on a growth path.”

Meanwhile, German unemployment will continue to fall next year, with the unemployment rate falling to 6.7% from 7% in 2011, according to the Government.

Last month, official data revealed unemployment in Germany dropped to its lowest level in more than 20 years in September.

The country’s unemployment rate fell from August’s rate of 7% to 6.6% and its job market has performed much better than in many other countries and many believe it is the result of the “Kurzarbeit” scheme, introduced by the Government, designed to prevent mass redundancies.

Last year, Germany’s unemployment rate plunged to 7.7% from 8.2% in 2009 as a result of the Government initiative.

Official data has revealed unemployment in Germany dropped to its lowest level in more than 20 years in September.

The country’s unemployment rate fell from August’s rate of 7% to 6.6%.

Unemployment now stands at 2.79 million – the first time since 1992 that the jobless total has been below 2.8 million.

It was also much better than economists had expected.

The country’s unemployment rate continues to fall and its job market has performed much better than in many other countries and many believe it is the result of the “Kurzarbeit” scheme, introduced by the German Government, designed to prevent mass redundancies.

Last year, Germany’s unemployment rate plunged to 7.7% from 8.2% in 2009 as a result of the Government initiative.

Many economists believe that Germany’s economic recovery appears to have enough “domestic stamina” to prevent a recession.”

However, despite the strong data, the economy, which is the euro zone’s largest, continues to suffer amid the ongoing debt crisis.

Germany, which has been regarded as Europe’s powerhouse, has been driving the recovery of the euro zone but a recent slew of weak data has forced many to re-evaluate its assessment of the economy.

Statistics office Destatis recently revealed German exports fell more than expected in July.

According to Destatis, exports fell by 1.8% in July on a monthly basis compared with a 1.2% drop in June. Economists had forecast a 0.1% fall for the month.

The sharp fall in exports will be of grave concern for the country’s Government. Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.

The Washington-based International Monetary Fund recently lowered its growth forecasts for both Germany and the euro zone this year and next.

It expects Germany’s economy to grow 2.7% this year and 1.3% in 2012.

Official data has revealed unemployment in Germany dropped to its lowest level in more than 20 years in September.

The country’s unemployment rate fell from August’s rate of 7% to 6.6%.

Unemployment now stands at 2.79 million – the first time since 1992 that the jobless total has been below 2.8 million.

It was also much better than economists had expected.

The country’s unemployment rate continues to fall and its job market has performed much better than in many other countries and many believe it is the result of the “Kurzarbeit” scheme, introduced by the German Government, designed to prevent mass redundancies.

Last year, Germany’s unemployment rate plunged to 7.7% from 8.2% in 2009 as a result of the Government initiative.

Many economists believe that Germany’s economic recovery appears to have enough “domestic stamina” to prevent a recession.”

However, despite the strong data, the economy, which is the euro zone’s largest, continues to suffer amid the ongoing debt crisis.

Germany, which has been regarded as Europe’s powerhouse, has been driving the recovery of the euro zone but a recent slew of weak data has forced many to re-evaluate its assessment of the economy.

Statistics office Destatis recently revealed German exports fell more than expected in July.

According to Destatis, exports fell by 1.8% in July on a monthly basis compared with a 1.2% drop in June. Economists had forecast a 0.1% fall for the month.

The sharp fall in exports will be of grave concern for the country’s Government. Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.

The Washington-based International Monetary Fund recently lowered its growth forecasts for both Germany and the euro zone this year and next.

It expects Germany’s economy to grow 2.7% this year and 1.3% in 2012.

Official data has revealed unemployment in Germany dropped to its lowest level in more than 20 years in September.

The country’s unemployment rate fell from August’s rate of 7% to 6.6%.

Unemployment now stands at 2.79 million – the first time since 1992 that the jobless total has been below 2.8 million.

It was also much better than economists had expected.

The country’s unemployment rate continues to fall and its job market has performed much better than in many other countries and many believe it is the result of the “Kurzarbeit” scheme, introduced by the German Government, designed to prevent mass redundancies.

Last year, Germany’s unemployment rate plunged to 7.7% from 8.2% in 2009 as a result of the Government initiative.

Many economists believe that Germany’s economic recovery appears to have enough “domestic stamina” to prevent a recession.”

However, despite the strong data, the economy, which is the euro zone’s largest, continues to suffer amid the ongoing debt crisis.

Germany, which has been regarded as Europe’s powerhouse, has been driving the recovery of the euro zone but a recent slew of weak data has forced many to re-evaluate its assessment of the economy.

Statistics office Destatis recently revealed German exports fell more than expected in July.

According to Destatis, exports fell by 1.8% in July on a monthly basis compared with a 1.2% drop in June. Economists had forecast a 0.1% fall for the month.

The sharp fall in exports will be of grave concern for the country’s Government. Export demand helped to bring Germany out of recession in the second quarter of 2009 – much sooner than many of its counterparts throughout the world.

The Washington-based International Monetary Fund recently lowered its growth forecasts for both Germany and the euro zone this year and next.

It expects Germany’s economy to grow 2.7% this year and 1.3% in 2012.