Figures released showed that the U.K economy grew in line with expectations in the second quarter, underlining optimism over the health of the economy and supporting the case for higher interest rates. GDP expanded at a rate of 0.7% since the end of June which met with forecasts. The UK economy grew by 0.4% in the first quarter of the year. We also saw the U.K.’s current account deficit narrow more than expected in the second quarter of the year. The current account recorded a seasonally adjusted deficit of £16.8 billion in the three months since June, narrowing from a deficit of £24.0 billion in the three months before. German annual inflation turned negative in September for the first time in eight months and the weaker than expected reading could push the euro zone rate below zero, boosting the case for the European Central Bank to take more action. Prices in Europe's largest economy, harmonised to compare with other European countries, fell by 0.2 percent after a 0.1 percent rise in August, according to preliminary data from the Federal Statistics Office. The German rate for September is the weakest since January. Other data showed Spanish prices falling at their fastest rate in seven months while Belgian inflation remained low, albeit above 1 percent for the first time since January 2014. All three readings were well below the ECB's euro zone target of just below 2 percent over the medium term. The ECB is already ploughing a trillion euros into the euro zone financial system to try to push inflation up towards its target. However, inflation and economic growth remain stubbornly low, so markets are starting to price in an expansion of its quantitative easing (QE) programme. Economists at credit rating agency Standard & Poor’s have warned that slowing growth in China would have strong knock-on effects for the Euro zone and some of Europe’s largest economies. S&P ran a simulation to assess the effects of China’s real growth slowing to 4.4 per cent next year and 3.9 per cent in 2017, instead of 6.3 per cent and 6.1 per cent, respectively, as previously predicted. They found that Eurozone real GDP would be 0.8 per cent lower than their current forecast by the end of 2017. Germany and the Netherlands would be hit even harder, with their real GDPs downgraded by 0.9 per cent and 1.5 per cent, according to S&P. Following earlier negative inflation release for Germany, the Eurozone slipped back into deflation, as the European Union’s statistics office, Eurostat, reported that prices in the single currency area had fallen year-on-year in September for the first time in six months. Eurostat estimated that consumer prices in the 19 countries sharing the euro fell 0.1 per cent last month compared to the same month the previous year, after a 0.1 per cent rise in August. The main factor behind the easing was a sharp annual drop in energy prices, which fell 8.9 per cent after a 7.2 per cent fall in August. The U.S. central bank delayed a rate hike at its September meeting in the face of uncertainty about the global economy, a market selloff in the U.S. and concern that inflation might fall further away from the Fed's two percent target. Consumer confidence rose and was higher than expected in September, according to a private sector report released on Tuesday. The Conference Board said its index of consumer attitudes rose to 103.0, the highest since January, from a downwardly revised 101.3 the month before. Economists had expected a reading of 96.1. The August reading was revised to 101.3 from 101.5. The Institute for Supply Management (ISM) said its index of national factory activity fell to 50.2 in September from 51.1 the month before. The reading was shy of the expected 50.6, according to a Reuters poll. US labour market conditions showed continued improvement with Continuing Jobless Claims falling in the month of September to 2.191m. The key nonfarm payrolls report showed that employers added only 142,000 jobs last month, falling far short of economists' consensus expectation for a rise of 203,000 jobs, according to a Reuters poll. Moreover, the August figures were revised sharply lower. That raised doubts that the U.S. economy was strong enough to justify the Fed's long-awaited interest rate increase, which would be the first since 2006. News focused again on the Asian markets which fell sharply on fears over growth prospects and commodity prices which continued to drive a global sell-off in equities. A weak survey of Chinese industrial profits, also added to investors' concerns about the world's second-largest economy. As a result of the negative data we saw shares in the world’s largest commodity trader Glencore fall as much as 28%. There are some fears that the slowdown in China could drag the global economy into another recession. According to two surveys released yesterday, the Chinese factory sector continues to show deterioration. According to the Caixin China General Manufacturing PMI, operating conditions are deteriorating at the fastest rate since March 2009 with the manufacturing activity index coming in at 47.3. It found that production is still falling, forcing firms to lay off more jobs as unsold goods piled up. The official PMI also showed a contraction of 49.7. India's central bank cut its key interest rate for the fourth time this year, and by more than expected. India central bank Governor Raghuram Rajan built on his record of surprises with policy decisions, taking advantage of a rout in commodity prices to lower borrowing costs by more than forecast. The Reserve Bank of India (RBI) reduced its repo rate to 6.75% from 7.25%, with economists having forecast it would trim rates to 7%. The bank has been under pressure to boost growth after inflation hit a record low of 3.6% in August due to falling commodity prices. The latest cut takes interest rates in the country to the lowest level in four and a half years.