China Construction Bank Corp. President Zhang Jianguo said the nation’s second-largest bank will cut new lending by about 70 percent in the second half to avert a surge in bad debt. “We noticed that some loans didn’t go into the real economy,” Zhang, 54, said in an interview yesterday at the bank’s headquarters in Beijing. “I feel that some industries are expanding too rapidly. For example, housing prices are rising too fast, and housing sales are growing too fast.”

The number of US workers filing new claims for jobless benefits fell sharply last week, a government report showed on Thursday, boosting views that the labour market and the economy were stabilizing. Initial claims for state unemployment insurance fell 38,000 to a seasonally adjusted 550,000 in the week ended August 1 from 588,000 the prior week, the Labour Department said.

ECB kept its main interest rate steady at a record low of 1.0% on Thursday, a spokesman said, despite tight credit and concern that the euro zone could be hit by deflation. In London, the Bank of England left its key lending rate unchanged at 0.50%, but surprised markets by saying it will pump in an extra £50 billion (e59 billion, $84 billion) into the economy. The British central bank decided “to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by £50 billion to £175 billion,” a statement said.

The U.S. Congress gave final approval to an emergency measure adding $2 billion to the “cash for clunkers” auto purchase program after consumer demand drained the initial $1 billion in less than a week.
 
In India annual inflation based on WPI stood at -1.58% for the week ended July 25, against 12.53% a year ago. The negative inflation is, however, no consolation for consumers as inflation in food articles is almost in double digits 9.7% for the week ended July 25. The sharp run-up in prices of food articles, which were up 0.8% in the week under consideration, does not adequately reflect in the WPI due to its low weight in the index.

Asian stocks fell for the third time in four days as lower earnings from Konica Minolta Holdings Inc. and DBS Group Holdings Ltd. fueled concern an equity rally in the past month had outpaced prospects for corporate profits.