Global stock markets have again plummeted as the fears continued to grow that it was only a matter of time before the global economy slid back into recession. The FTSE 100 Index ended a week of falling prices which ultimately £147.9b, or 9.8%, wiped off its value.
This is the FTSE’s worst performance since that day in October 2008 when the Lehman Brothers investment bank collapse and turmoil was triggered across the global financial markets, which effectively kick started the credit crunch. Markets have plummeted across the globe amid the fears that the US are heading back into recession and Europe’s debt crisis seem to get worse every day.
City analysts believe that share prices are going to continue to plunge unless the Governments get their act together and convince the markets that they can, and will, pay off their loans. Michael Hewson, an analyst at CMX Markets has warned that this crisis sis set to run and run, and could end up making the Lehman’s disaster resemble a Tupperware party.
He said that there was a high level of nervousness amongst the traders and that it would carry on into next week due to the US economy showing all the signs of slowing down. He added that the biggest problem was still in the Eurozone and there were as yet, still no concrete measures in place to stabilise Spain and Italy’s precarious position.
British PM David Cameron, who is currently taking his summer break in Italy, has spoken to Angela Merkel, his German Counterpart about the current financial instability in Europe and the US. He is also in contact with George Osbourne, who is in the USA and the deputy PM Nick Clegg, who is currently in France.