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Business Bites: Australia cuts the cost of borrowing

1 May 2012 Last updated at 17:51 BST

The Reserve Bank of Australia has reduced the cost of borrowing in a move to boost its economy.

The bank cut its key rate to 3.75% from 4.25% - much more than the 0.25% most analysts were expecting.

Its hoped mortgage lenders will be quick to pass on the cut, as a third of Australia's home owners have variable rate mortgages.

Meanwhile, China's manufacturing sector has expanded for the fifth month in a row.

The BBC's Aaron Heslehurst reports on the key financial stories of the day.