European shares rose today after China announced that it will cut its benchmark interest rate to 4.35 percent, a hint that Beijing may be expecting a further slowdown in their economy.

The Chinese central bank also cut the ratio of Chinese currency that it expects its banks to hold. Last year China’s growth fell to 7.4 percent, and the government have since put measures into place to ensure growth does not fall below 7 percent this year.

European shares reacted well to the news as investors saw the chance to gain cheaper credit in China. The FTSE rose 1.3 percent this afternoon before cooling down to a steady 1.1 percent (1617GMT), with the German DAX up 3.08 percent. Brent crude also rose 0.8 percent to $48.46 per barrel.

The changes will come into effect on Saturday.