Chinese bill yields higher, UK interest rates unchanged

The People's Bank of China took a small step on Thursday to curb liquidity. Bloomberg reports:

China’s central bank sold three-month bills at a higher interest rate for the first time in 19 weeks after saying its focus for 2010 is controlling the record expansion in lending and curbing price increases.

Stocks fell across Asia and oil declined on concern growth will slow in China, the engine of the world economy’s recovery from its worst recession since World War II. The People’s Bank of China offered 60 billion yuan ($8.8 billion) of bills at a yield of 1.3684 percent, four basis points higher than at last week’s sale, according to a statement.

The Bank of England was also in the news on Thursday. From Reuters:

The Bank of England kept the scale of its asset purchase programme unchanged at 200 billion pounds on Thursday and said it would decide whether or not to extend it next month.

The central bank also left interest rates at a record-low 0.5 percent, a decision which had been unanimously expected by economists polled by Reuters and caused no reaction from sterling or government bonds.

Elsewhere in Europe, the improving economic picture was bolstered by news of a jump in confidence but offset by a fall in retail sales. From Bloomberg:

An index of executive and consumer sentiment in the 16- nation euro region rose for a ninth month to 91.3 from 88.8 in November, the European Commission in Brussels said today. That beat economists’ forecasts and was the highest since June 2008, three months before Lehman’s collapse exacerbated the global financial crisis. Retail sales dropped 1.2 percent in November from the previous month, a separate report showed.