UK Markets continue to fall as the FTSE 100 drops down to 5183.38p

By mosesbet · Filed Under Market News, News Comments Off on UK Markets continue to fall as the FTSE 100 drops down to 5183.38p 

The UK and US markets suffered a derisory week as the FTSE 100 dropped 2.05% down to 5183.38, while other markets in the US, France, Germany (DAX 100) and Spain also dropped 3%.

The latest drop in market prices has been caused by further worries over the Eurozeon debt crisis which is spreading out of Greece and Italy. Speculators and traders have shorted their stock in risky assets and invested more money in gold.  Demand for gold has increased more than 30% from July – September 2011 while the gold price has also increased more than 12% up to $1889.

The UK services sector has slowed down by the largest amount in 10 years, with the headline index dropping from 55.4 down to 51.1 in August.  The US market will be closed today (Labor Day Holiday) which means no economic news will be published, however further damaging economic news from the UK will be released at 12am GMT by the British Retail Consortium which is expected to report 0% growth after signs of recovery in July.

The systemic route of the markets has come the sovereign debt crsis from Italy and Greece, who were both given stern warnings by the European Central Bank earlier this week to implement austerity measures, cut public sector spending and raise taxes. This has been met with disapproval from the Greek citizens however, where a tug of war is being played between repairing confidence in economic markets to appease their creditors and gaining the vote of the public.

At this moment in time, the EU is frustrated over the amount of time it has taken both the Greek and Italian governments to implement their plans, which has increased anxiety among speculators in domestic markets.

Germany Chancellor Angela Merkel has also come under pressure following defeat in regional elections over the Eurozone crisis. The Christian Democrat part (CDI) lost more than 6% of the vote in the regional elections.  They could suffer an even bigger loss as the German Constitutional Court issues a ruling about the legality of the bailouts this week.

 

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