US bail-out woes hit FTSE
- 00:02:40
- ITN
US bail-out woes hit FTSE
Banks led a deteriorating picture for blue-chip shares amid mounting concerns over US plans for a $700 billion (£383 billion) bank bail-out. The FTSE 100 Index was down 2 per cent or more than 100 points, extending the 1 per cent fall seen during the first hour of trade. It follows a 1.4 per cent fall on Monday after signs that Washington's much-heralded rescue package was running into difficulties with US politicians worried about the huge cost. Banks were among the worst hit FTSE firms, with HBOS down 12 per cent and its proposed new owner Lloyds TSB 8 per cent worse off. Royal Bank of Scotland, the UK bank which has taken the biggest credit-crunch losses this year, was also down more than 7 per cent. The banking sector was hit by figures showing mortgage lending halved during August and the number of loans approved for house purchase slumped to a new record low of just £2.1 billion during the month, less than half of July's amount. British Airways was another big faller, down more than 4 per cent, after Monday's shock $25 a barrel leap in oil prices. Europe's leading stock markets were also showing sizeable falls, with Paris's CAC 40 down nearly 2 per cent and Frankfurt's Dax down 1 per cent. The market jitters were sparked off by a 3 per cent fall for Wall Street's Dow Jones Industrial Average last night, and similar drops overnight in Asia. US Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, the architects of the bail-out, are due to face tough questions at a hearing from Congressional leaders about the rescue package's cost, how it will work and how taxpayers will be affected.
ITN | September 23, 2008
