US faces worst quarterly drop on record

Dire economic figures from the US wiped out July’s gains across the global markets as traders were shaken by the record contraction.

The US economy shrank at a dizzying 32.9% annual rate in the second quarter – by far the worst quarterly plunge ever.

European markets had already been deeply in the red before the GDP update, with early trading hit by a worsethan-forecast contraction in the German economy.

UK stocks slipped further into the red after the update, having already fallen lower on a raft of negative updates from major firms.

The FTSE 100 closed 141.47 points higher at 5,989.99p at the end of trading yesterday.

The German Dax decreased by 3.65%, while the French Cac moved 2.36% lower.

Meanwhile sterling tipped higher after both the euro and dollar were hammered by the poor economic figures.

The pound rose 0.31% versus the US dollar at 1.303 and was up 0.3% against the euro at 1.105.

The price of oil slumped into the red as the wider bearish sentiment hit the oil market.

The price of a barrel of Brent crude oil decreased by 2.56% to 42.64 US dollars.

The biggest risers on the FTSE 100 were BAE Systems, up 28.1p at 505p, Rentokil, up 9.2p at 557.6p, AstraZeneca, up 136p at 8,751p, and Flutter, up 145p at 11,730p.

The biggest fallers of the day were Lloyds, down 2.16p lower at 26.2p, Standard Chartered, down 26.2p at 394.1p, Legal & General, down 13.7p at 211.2p, and Royal Dutch Shell, down 68p at 1,158.8p.