Worldwide markets plunged into turmoil
16 September 2008
London shares have slumped for the second day running in the wake of the collapse of US investment bank Lehman Brothers.
The FTSE 100 is down another 229 points and shares in HBOS, owner of Halifax, slumped by 40% at one stage today. Barclays was down 25p to 291p and RBS, owner of NatWest, fell 10.25p.
The combination of the collapse of Lehman Brothers, the Bank of America takeover of Merrill Lynch and growing concerns about the future of the world’s largest insurer AIG are causing shockwaves across the world.
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Shareholders in Japan and China suffered with the Nikkei index falling by almost 5% and the Shanghai index dropping 4.3%.
Chancellor Alistair Darling told the BBC’s Today programme that global cooperation is needed to fight the crisis. "We need to take action internationally, and yesterday you saw right across the world the American Fed, the ECB, our own Bank of England and Japan all intervening,"
In further bad news for homeowners, there is concern higher mortgage rates are on the cards as banks become even more wary of lending to each other.
Meanwhile UK inflation hit a higher than expected 4.7% in August.
SaveBorrowSpend Philippa Adam
