FTSE pulls back as Bank of England acts to calm markets

FTSE pulls back as Bank of England acts to calm markets

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London’s top flight index pulled back from its 7% plunge after the Bank of England pledged to intervene to help shore up the markets.

Bank of England governor Mark Carney said the Bank is prepared to provide £250bn to support the markets, but added that “some market and economic volatility can be expected as this process unfolds”.

The FTSE 100 Index was down 4% or 275.6 points to 6057.7, as his comments appeared to calm London’s premier blue-chip index.

It comes after the London market tanked by more than 400 points following David Cameron’s announcement that he would quit as UK prime minister by October after Britain’s decision to leave the European Union.
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European markets were also clawing back from hefty falls of more than 9%, but remained heavily in the red, with Germany’s Dax down 5.8% and the Cac 40 dropping 7.7%.

Sterling began to creep back from its 10% fall in the early hours of Friday morning, as it dropped 7% against the dollar at 1.392 US dollars.

The pound was down just under 5% against the euro at 1.250.

Alex Edwards, head of dealing desk at UKForex, said: “The pound has recovered off of this morning’s low. Carney offered some reassurance to a market desperate for it, and cable is back through 1.38.

“The next head to roll is likely to be Osborne, but it’s unlikely to give the pound any more impetus – a recovery through 1.40 seems very unlikely at this stage. The US reaction will be interesting, and we could still see fresh lows in the pound today.”

The London market resembled a sea of red, with heavy-weight financial stocks and travel firms falling sharply.

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