IN A sign of growing concern that the world economy is deteriorating, China, the UK and the eurozone all loosened monetary policy in quick succession earlier yesterday.

In the US, meanwhile, hopeful signs emerged for the struggling labour market, offering President Barack Obama's re-election campaign a possible boost.

However, dark clouds continue to gather over the US economy, with the vast services sector crawling forward at its slowest pace in nearly two-and-a-half years last month and retailers reporting sales below expectations, other data showed yesterday.

The economy has been hit by turbulence from Europe's debt crisis and fears of tax increases at home next year, undermining confidence among businesses and ordinary Americans.

The data showed the US economy had not completely lost steam, but it was not significantly accelerating either, said Anthony Chan, chief economist at Chase Wealth Management.

"We are still looking at an economy that is growing, and if labour market conditions continue to improve, that's likely to give consumers the wherewithal to give the US economy a second wind in the second half of the year."

US private employers added 176000 new workers to their payrolls last month, the ADP National Employment Report showed, after hiring 136000 workers in May.

The government will release its closely watched employment report for last month today.

Earlier yesterday, the European Central Bank and the People's Bank of China cut their benchmark borrowing costs, while the Bank of England extended its asset-purchase programme.

They acted two weeks after the Federal Reserve expanded a programme lengthening the maturity of bonds it holds and chairman Ben Bernanke indicated that more measures would be taken if needed.

"The actions had the look and feel of a co-ordinated global easing campaign," said Nick Kounis, head of macro research at ABN Amro Bank in Amsterdam. "The central banks are trying to arrest the synchronised slowdown in global economic growth that has taken shape."

The Bank of England began yesterday's stimulus push, saying it would resume buying bonds two months after stopping in a bid to pull the economy from recession. Governor Mervyn King and colleagues raised their asset-purchase target by £50bn to £375bn, meeting the forecast of most economists.

They said the economy would likely remain sluggish after contracting in the past two quarters.

Reuters, Bloomberg