FTSE plummets as recession announced

Wednesday, 23 January 2008 12:00 AM

By politics.co.uk

The news Britain is now officially in a recession has hit the FTSE with shares plummeting 1.6 per cent this morning.

Banks and insurers also continue to drag down the FTSE 100, as the index edges closer to the 4,000 mark.

The UK's blue-chip index dropped a further 38 points after opening to hit 4,014.22 by 08:40 GMT.

Barclays shares fell by 14 per cent to just 50.70p, while Legal & General declined 6.46 per cent.

Short-selling has been blamed for the sharp price falls in financial stocks after the FSA lifted a ban, although the regulator has denied this is the case.

Defensive stocks, which tend to do well in a recession, continued their rally on the index.

Pharmaceutical companies Shire and AstraZeneca both recorded rises of 2.39 per cent and 2.3 per cent respectively.

Investors are awaiting fourth quarter GDP figures, which are expected to show the UK entered recession in the second half of the year.

Overnight, the US Dow Jones fell 1.28 per cent, while in Asia, Japan's Nikkei 225 fell 3.81 per cent, a two-month closing low.

Tags:
• economic policy
,
• economy
,
• economy and finance