Almost £ 175 billion was wiped from the British stock market in just a week – hammering the pensions and savings of millions.
While the market that was activated by Donald Trump's trade war was activated, the FTSE 100 suffered its sharpest decrease since the outbreak of the pandemic.
The punishing rout, which was reflected from Wall Street to Asia, came after Mr Trump had drawn drastic rates on trading partners, which fueled the fear of a global recession. Analysts warned that the route threatened with pension plans for those who wanted to claim their pension within the coming years.
While the worldwide markets took a hit of £ 4.4 trillion this week, Wall Street Giant JP Morgan warned: “There will be blood.”
The investment bank said that the chances of a global recession were enriched from 40 percent to 60 percent after Mr Trump had imposed a basic line rate of 10 percent on all imports to the US. Some countries were hit by higher levies of up to 50 percent, which sent shock waves through global markets.
The route became more intense yesterday after Beijing took revenge with 34 percent tax on imported American goods, with the distance between the two largest economies that bring the world closer to a complete trade war.
Fear that other countries will impose tit-for-tat rates in the coming days, burned the panic that spread through markets.
In writing on his social social platform, Mr. Trump insisted: “China played it wrong, they panicked – the only thing they can't afford to do.”
The London Stock Exchange crashed this week after President Trump announced a wide range of rates for goods that came in the US
The president unveiled the rates per country in the White House Rose Garden
Mr. Trump also unveiled a new 'golden card', an American residence permit for foreigners who cost $ 5 million (£ 3.9 million). He showed off a prototype of the 'Trump Card' to reporters on board his presidential Jet Air Force One
He said that the sharp fall in stock prices was a buying option for investors. It is a “great time to get richer, richer than ever before,” the president said, promising that his “policy would never change.”
Mr. Trump also unveiled a new 'golden card' yesterday, an American residence permit for foreigners who cost $ 5 million (£ 3.9 million). He showed off a prototype of the 'Trump Card' to reporters on board his presidential Jet Air Force One.
After having deposited 1.5 percent on Thursday, the FTSE 100 index from Blue-Chip companies fell by 4.9 percent the sharpest decrease of five years yesterday. The FTSE 250 in the interior fell by 4.4 percent and the FTSE All-Share Index, which follows around 600 London-raised companies, fell by 4.87 percent. A total of £ 173.5 billion was wiped off the week of the value of the index.
Analysts warned that the enormous sale will hammer pensions and savings. “For those who have been removed from the retirement for a few years, market volatility can be real concern,” said Myron Jobson, senior analyst for personal finances at the British stock broker Interactive Investor.
'An extensive decline in shares can considerably decrease the value of their pension pots, just as they prepare to draw on it. This in turn threatens to make plans for retirement.
“For pensioners who rely on investment growth, a weaker stock market can mean that their savings are not that far planned.”
Dan Catsworth, an investment analyst at AJ Bell, said that British savers 'have to concentrate in the long term and should not lose trust' and that 'the unrest caused by rates and fears for a worldwide trade war is no reason to stop investing'.
Tremors were felt on the global markets, with European shares still taking a success while nurses from earlier in the week lose. The Euro-wide Stoxx 600 fell another 5.2 percent after a decrease of 2.6 percent on Thursday.
In Frankfurt the DAX fell by 4.66 percent and the CAC 40 fell in Paris by 4.26 percent. Milan's FTSE MIB tumbled 6.53 percent, while the IBEX 35 in Madrid fell 5.8 percent.
Wall Street was also hammered on Friday, with the Benchmark S&P 500 index no less than 3.8 percent and the industrial average of Dow Jones fell by 3.4 percent. The technology-oriented Nasdaq composite tumbled 3.98 percent after approximately 5 percent had wiped out the value on Thursday. The index fell by more than 20 percent compared to its recent record high and introduced a 'bear market' in what investors call.
The massacre in American markets also damages British savers, because many people have part of their pension and other investments in US shares.
A competitive decrease in American prices was a “good memory to have a diversified portfolio,” said Mr. Catsworth of AJ Bell.
The CBOE Volatility Index, known as the fear meter of Wall Street, reached the highest level since August 2024 at 37.66 points.
“Many investors I spoke to have just said in this kind of environment, let's go for cash and just wait,” said Rick Meckler, a partner at Family Investment Office Cherry Lane Investments.
“The market praises in a worldwide recession,” added George Saravelos, worldwide head of FX Research at Deutsche Bank.
Asian shares break down on Thursday at night after the continent had been beaten with some of Trump's highest levies.
Nikkei from Tokyo crashed 2.75 percent, Hong Kong's Hang Seng fell 1.52 percent and the Chinese Shanghai composite fell by 0.24 percent.
