UK has to sit tight and ride out storm

THE FTSE 100 index ended up last night where everyone feared it would – in dire straits after another shocking day of panic-selling. Taking the week as a whole, it was the worst set of figures since the Black Monday crash of 1987.

The dramatic intervention of the Treasury a few days ago with bundles of taxpayers’ money failed to make any discernible impact, even although it might play a bigger role eventually.

It appears that all we can do now is sit tight and wait for the storm to blow itself out.

As we saw with the Northern Rock crisis, fear is a powerful factor in all of this. No matter how many reassurances the company and ministers gave to shareholders and depositors, once fear and panic set in there was no stopping it.

We are seeing much of the same now; as soon as one stock market ends up like a nervous wreck at the end of trading, another picks up where it left off in another part of the world. And so it goes on in a never-ending vicious circle. The fear gripping the markets yesterday became so bad that the traditional investment favoured by the wealthy – gold – suddenly looked a lot more attractive than anything else and its value went up on the market.

As oil dropped, Gordon Brown took the opportunity to confront petrol retailers and energy companies and demand they pass these savings back to the customer. Some major petrol companies obliged.

It is something consumers have demanded and been ignored about for years, but it takes the threat of a global recession to make it happen.