Shares and the pound tanked and authorities borrowing prices soared yesterday because the storm clouds hanging over the worldwide financial system darkened.
Official figures confirmed output within the UK fell 0.3 per cent in April – the second month-to-month decline in a row – because the financial restoration from Covid went into reverse.
The downturn fuelled fears over the state of the worldwide financial system after figures final week confirmed inflation within the US hit a 40-year excessive of 8.6 per cent in Might.
Manufacturing droop: Official figures confirmed output within the UK fell 0.3% in April – the second month-to-month decline in a row – because the restoration from Covid went into reverse
Central banks all over the world at the moment are elevating rates of interest in a determined bid to get inflation again beneath management.
However it’s feared this might tip the financial system into recession.
On one other bleak day for traders, the FTSE 100 tumbled 1.5 per cent, or 111.71 factors, to 7205.81 and the FTSE 250 was down 2.6 per cent, or 513.11 factors, to 19160.21.
The losses had been mirrored elsewhere with the Dax down 2.4 per cent in Frankfurt, the Cac off 2.7 per cent in Paris and the FTSE Mib 2.8 per cent decrease in Milan.
On Wall Road, the Dow Jones Industrial Common fell 2.8 per cent whereas the S&P 500 was down 3.9 per cent and the tech-dominated Nasdaq shed 4.7 per cent.
Sterling additionally took a pounding, sinking under $1.22.
And authorities borrowing prices soared with bond yields up within the US, UK and Europe on expectations of additional rises in rates of interest.
The US Federal Reserve appears to be like set to lift charges once more tomorrow whereas the Financial institution of England is more likely to strike on Thursday.