Recession fears rock shares and the pound

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Recession fears rock shares and the pound as storm clouds collect round the international financial system

Shares and the pound tanked and authorities borrowing prices soared yesterday as the storm clouds hanging over the international financial system darkened.

Official figures confirmed output in the UK fell 0.3 per cent in April – the second month-to-month decline in a row – as the financial restoration from Covid went into reverse.

The downturn fuelled fears over the state of the international financial system after figures final week confirmed inflation in the US hit a 40-year excessive of 8.6 per cent in May.

Production droop: Official figures confirmed output in the UK fell 0.3% in April – the second month-to-month decline in a row – as the restoration from Covid went into reverse

Central banks round the world at the moment are elevating rates of interest in a determined bid to get inflation again below management.

But 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 have 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 Street, the Dow Jones Industrial Average 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 beneath $1.22.

And authorities borrowing prices soared with bond yields up in the US, UK and Europe on expectations of additional rises in rates of interest.

The US Federal Reserve seems to be set to boost charges once more tomorrow whereas the Bank of England is prone to strike on Thursday.

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