Friday 5 February 2010

Economy faces a bumpy ride

Yesterday the FTSE 100 index tumbled more than 2.1 per cent - or 113.8 points to settle on 5139.31 at the end of the day.

It was the largest one-day fall for three months and prompted speculation that the economic recovery was faltering.

Bad news from the eurozone, with huge debts for countries such as Greece and Spain, appeared to be the catalyst for a selling spree.

Analyst at BGC Partners, David Bulk, said: "This week's story is Greece. Next week's story could be Portugal. Nex month could be Spain and maybe even Italy. The next quarter - who knows? It coiuld be the UK and next year the US."

He said that equities were "uncomfortable".

It's a gloomy prognosis, and a "double-dip" would appear to be on the cards. Although still rising, the pace of house price rises slowed in January.

The uncertainty about the General Election won't help.

It looks like being a bumpy economic ride for the next few months.

No comments:

Post a Comment