Pound in for more strife
By Richard Phillips and David Usborne in New York
Sunday 08 December 1996
Stock markets tumbled worldwide on Friday, wiping pounds 20bn off the value of UK shares, as the powerful Fed chief tried to prick what he saw as the overvalued bubble of Wall Street share prices.
Investors there rallied late on, however, which means UK shares are likely to bounce back on Monday from their biggest day's drop since October 1992. Surprisingly weak US jobs figures, showing employment rising only moderately, provided the tonic - reducing inflationary fears and the immediate threat of higher interest rates.
But Neil Mackinnon, chief economist at Citibank in London, warned this weekend that European investors would be more cautious on their strategy for 1997 in the wake of Friday's chaos. "Investors will have to sit down and take a hard look at where they go from here." He said international investors had also burned their fingers on sterling, which had upset predictions repeatedly.
The currency has defied pundits this year, climbing to its highest levels against the dollar and the mark since the UK left the ERM in 1992, only to weaken last week after Eddie George, the Governor of the Bank of England, played down the need for further rises in interest rates.
The outlook for sterling this week will be dominated by political considerations, with the Government losing its majority after Tory MP Sir John Gorst said he would refuse to co-operate with the Government.
Sterling closed at $1.64 in London, having recovered much of the ground lost on the news of Sir John's decision. It was also bailed out by the dollar's weakness against other major currencies, following Mr Green- span's remarks.
The continuing row between Kenneth Clarke and John Major, however, is likely to take a further toll on sterling.
tvSpolier alert: Find out the result of a heated final show
peopleWhat advice would David Cameron give to his younger self?
Beatles rush out 'bootleg' album to defy EU copyright law
Geoffrey Macnab reviews The Desolation of Smaug - the meat in Peter Jackson's Hobbit sandwich
Harvey Weinstein reveals his secret weapon on-set
Now that an oil trader's drinking has got him sacked, will we all have to make do with an afternoon latte?
Chiwetel Ejiofor and Idris Elba get nods for Best Actor, which no black Brit has ever won
Auction house to give away $1m masterpiece in charity raffle - and tickets are only $100 each
Nelson Mandela memorial: ‘Bogus’ sign language interpreter made mockery of Barack Obama’s tribute in Soweto
Mystery of Epping Forest 'big cat' is solved
French café starts charging extra to rude customers
Australia: Gay marriage law reversed by high court less than a week after first weddings
Australia incest case: Severely deformed children found in remote farming community after generations of inbreeding
- 1 Nelson Mandela memorial: ‘Bogus’ sign language interpreter made mockery of Barack Obama’s tribute in Soweto
- 2 Mystery of Epping Forest 'big cat' is solved
- 3 French café starts charging extra to rude customers
- 4 Australia incest case: Severely deformed children found in remote farming community after generations of inbreeding
- 5 Physicists discover 'clearest evidence yet' that the Universe is a hologram
- < Previous
- Next >
iJobs Money & Business
£30000 - £45000 per annum + Bonus + Benefits: Harrington Starr: Regulatory Man...
£50000 - £75000 per annum + benefits + bonus: Harrington Starr: Pre-Sales / Cl...
£40000 - £60000 per annum + Bonus + Benefits: Harrington Starr: Regulatory Man...
£40000 per annum: Harrington Starr: Senior Network Engineer (CCNP, CCIE, Netwo...