Global crises cause chaos
Markets plummet as tensions flare
AROUND £500billion was wiped off global stock markets yesterday amid a cocktail of toxic tensions.
Concerns about a slowdown in China’s powerhouse economy, also hit by a trade war with the US, combined with worries about Italy’s finances sent shares down sharply. There are also concerns about the situation in oil-rich Saudi Arabia, under pressure over the death of journalist Jamal Khashoggi.
Here, a CBI survey of manufacturers found optimism has tumbled at the fastest pace since the UK’s vote to leave the European Union in 2016.
More than £22bn was wiped off the FTSE 100 after it dived 87 points to a seven-month low of 6955.2, which is 10% below its May peak. The FTSE All World Index, which takes in most global markets, was down 1.5%.
Fiona Cincotta, senior market analyst at City Index, said sell-off in European markets was followed by a “bloodbath” in early US trading. Others said fears over
Whitbread could launch
» budget hotel chain Premier Inn elsewhere in Europe.
It has already expanded to Germany and boss Alison Brittain said this was a “good foundation stone on which to expand”. At home, Brittain said its new super-budget offshoot Zip by Premier Inn was targeting an untapped £1billion market. Meanwhile, Whitbread said “weaker consumer demand” saw Premier Inn’s UK sales grow just 0.2% in the past six months. But profits rose 2.5% to £270m.
Whitbread is concentrating on Premier Inn after agreeing to sell Costa Coffee to Coca-Cola for £3.9billion.
Brexit and trade tensions were “exacerbating already skittish global sentiment”.
Samuel Tombs, of Pantheon Macroeconomics, said the FTSE 100 was on track for its worst month for six years.
But he added: “Since the foundation of the FTSE 100 in 1984, prices have fallen by more than 10% in the space of 12 months on eight occasions, but the economy has entered only two recessions. Those recession as were driven much more by declines in bank lending than falls in equity prices.”
The CBI survey found spending by manufacturers on new plant and machinery is set for its biggest fall since July 2009.
It also highlighted growing concerns that Brexit could fuel a skills shortage.
DIY chain Wickes » has been hammered by tough trading – with sales falling 4.2% in the three months to September 30.
Its owner Travis Perkins blamed “significant price pressure and weak consumer confidence”. But better results in Travis Perkins’ builders’ merchants and plumbing arm helped group sales rise 4.1%.