UK NEWS

BROWN DITHERS AS £93BILLION WIPED OFF UK SHARES

BOILING POINT: Experts say Brown must offer a similar guarantee

Monday October 6,2008

By Nicola McCafferty for express.co.uk

Comment Speech Bubble Have your say(26)

THE world's financial markets went into meltdown this afternoon as the FTSE 100 suffered its biggest fall since Black Monday.

As Gordon Brown continued to dither over compensation for UK savers, more than £93 billion was wiped from the value of the UK’s biggest companies as the FTSE suffered its biggest fall in 20 years.

As fear swept through global markets and governments rushed to prop up banks across Europe the FTSE slumped 7.8 per cent - its largest one-day percentage decline since the aftermath of Black Monday in October 1987.

The index closed 391.1 points lower at 4589.2 - its lowest since October 2004 - as investors were rocked by the latest turmoil.

German Chancellor Angela Merkel, French President Nicolas Sarkozy and Gordon Brown at the EU summit

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Hopes that the US would ease the global financial crisis were dashed as the Dow Jones fell more than four per cent to dip below 10,000 for the first time in four years.

I’ve never seen anything like this. What we are seeing over the last few weeks is a once-in-a-lifetime event

James Hughes, CMC Markets analyst

But Chancellor Alistair Darling - reportedly considering moves to shore up UK banks with taxpayers’ cash - did little to restore shattered confidence with firm commitments.

He said “all practical options must remain open” for dealing with the crisis, but added that it would be “irresponsible” to give a running commentary on plans.

In London, trading screens turned red after a weekend in which European governments rushed to support failing banks hit by lack of funds.

CMC Markets analyst James Hughes said: “I’ve never seen anything like this. What we are seeing over the last few weeks is a once-in-a-lifetime event.”

The FTSE was in freefall again today

Today's dramatic scenes on the stock markets came after pressure piled on Gordon Brown to guarantee all savers' deposits in British banks after Germany became the latest government to offer blanket protection to their depositors.

In a shock decision last night, German Chancellor Angela Merkel followed the example set by Ireland and Greece and announced a 100 per cent security offer on savers' bank deposits to prevent a run on the country's lenders.

Italy’s largest bank, Unicredit, also warned on profits after announcing asset sales and plans to shore up its balance sheet with a 6.6 billion euro (£5.1bn) boost.

Meanwhile, French bank BNP Paribas agreed to buy a majority stake in struggling bank Fortis - which is already part-nationalised.

Elsewhere, Iceland’s stock exchange suspended trading in shares of six major banks as its Government works on an economic rescue plan. Iceland’s Glitnir bank was nationalised last week.

The shockwaves reverberated through global stock markets. In the US, Wall Street’s Dow Jones Industrial Average traded below the 10,000 mark for the first time in four years.

In Asian markets, Japan’s Nikkei 225 average slid more than 4 per cent to a four-year low, while in Hong Kong the Hang Seng tumbled 5 per cent as Friday’s backing of a US financial rescue was all but forgotten.

In London, investors were unnerved by reports that the Government could take big stakes in banks - effectively part-nationalisation - to strengthen their finances. Halifax Bank of Scotland and Royal Bank of Scotland both slumped 20 per cent, while Barclays lost 15 per cent.

Just a week ago the UK’s benchmark index also fell more than 5 per cent as markets were stunned by Bradford & Bingley’s nationalisation.

Manoj Ladwa, senior trader at ETX Capital, said: “Black Mondays used to be a once-a-decade event - now they’re coming along more regularly than a London bus.”

EXPRESS CITY: IN-DEPTH ANALYSIS OF TODAY'S MARKET PLUNGE

WHY ?

07.10.08, 10:59am

the shops full. People are stocking up
with long term goods.

Someone mentioned here about the 93b
lost on the stock market. Whats important
is the 160b spent plus a proposed 40 b
of government money to be put into RBos
...........

If liquidity in the global markets isn't restored
this money will be lost, gorden brown will
run out of downing st and we'll have a
1930's style depression, to deal with .

• Posted by: idiot • Report Comment

NO...BEEFSANDWICH....

07.10.08, 8:01am

...it's not you, it is the same over here in Germany. Shops are full to capacity, but I did notice that there are less cakes, biscuits, sweets, etc being sold. A lot of workers are on a 4 day week. I think the shops will notice a difference at Christmas, people will buy clothes and necessities instead of luxuries and electrical goods.

• Posted by: Disgruntled • Report Comment

BROWN DITHERS AS £93BILLION WIPED OFF UK SHARES

07.10.08, 7:54am

To be honest with you it shows once more that the only people government cares about are thse who have inflicted this calamity upon the common hard working individuals, and with this dithering of NOT securing 100% of savings/investements in banks, will prove this.
Someone should also remind these morrons and buffons of the likes of Brown and Darling this very crucial fact, that most of the UK's pension funds are locked into these UK banks and here we are talking about millions of pound sterling...are we to have these pension funds go to wall, if there is any further bank collapse in the UK?

• Posted by: executioner • Report Comment

THIS 'ORRIBLE LITTLE MAN HAS OUTDONE HIMSELF.

07.10.08, 7:24am

Through his action in 1999-2002, he dumped 400 tonnes of British gold reserves when the market was low and cost my beloved lime juicers £2bn.

At the time I felt it couldn't possibly get any worse than that. But wait! This is Gordy Broon! He makes The Village Idiot (Bush) look almost - but not quite - "normal."

But that's all pocket change compared to his INaction with the current market and a loss of £93bn.

Imagine how many more obtuse taxes and fees and new offences for which FPNs can be issued it will take to make this up.

What sort of international recognition can he possibly be striving for?

• Posted by: Promontory • Report Comment

THEY'RE ALL SPECULATING SO MUCH ITS HARD TO BELIEVE ANYONE....!

07.10.08, 1:03am

I hope it sepculates their demise and this pathetic so called hype and propoganda!

• Posted by: RealIstic08 • Report Comment

CAN ANYONE EXPLAIN WHY............

06.10.08, 11:44pm

This is strange but true.

I have read all this about this economic crisis BUT, can anyone explain this?

I just went down to my out of town shopping centre. I could not get my car off the motorway because the access road was totally blocked with cars going nose-to-tail to the shops.

When i eventually got to the centre, the car parks were all full to capacity.

After a long delay I eventually found a free parking space.

When I got into the shops they were all heaving with people.

I looked for all the shops panicking to sell-off their unsold stock but there were none to be found. There were no bargains whatsoever on the shelves. Everything was being sold at full price and there was no evidence whatsoever of any fall-off in demand.

I saw all this with my own eyes so has anyone else seen anything different or is this downturn all hype and just a figment of someone's imagination?

From where I am sitting i have seen no shortage of willing customers in the shops.

Is it me?