Many major companies are seeing their worst years on record as more than £ 40bn is wiped off the FTSE 100. Rolls-Royce’s share price has lost 23 percent of its value in the last year, bringing it down to the worst it’s been since 2005. Netflix meanwhile is experiencing its worst year on record with a stock value of -72.4 percent, as Amazon hits its lowest point since 2008 with a stock value of -36.8 percent.
Tech investor Scottish Mortgage Investment Trust (-5 percent) and online grocery tech business Ocado (-5.3 percent) are also experiencing heavy falls in their market value.
Meanwhile, oil giants BP and Shell were down 2.4 percent and 1.9 percent respectively, despite raking in enormous profits.
The economy went into reverse in March, further fueling fears of a UK recession.
According to the latest GDP report, the economy shrunk by 0.1 percent and the growth figure for February was revised down to zero.
On a quarterly basis, the economy grew just 0.8 percent – behind what was forecasted.
This comes as the Bank of England (BoE) suggests increasing interest rates even further to curb soaring inflation – a strategy that may spell even further losses for the stock market.
BoE official Dave Ramsden said this morning: “Certainly on the basis of my current assessment of prospects, we’re not there yet in terms of how far monetary policy has to tighten.
“I’m still very, very supportive of the forward guidance that there may well need to be further tightening in the coming months.”
Inflation is already at 7 percent, and is expected to hit 10 percent before the end of the year.
The collapsing stock market comes after UK business investment fell by 0.5 percent in the first quarter of 2022, likely a contributing factor.
As a result business investment was 9.1 percent below its pre-coronavirus pandemic levels, according to today’s GDP report.
Major cryptocurrencies such as Bitcoin have also taken a huge fall this week, with more than $ 1.5 trillion (£ 1.2 trillion) wiped off the entire crypto market.
Bitcoin lost 12.5 percent of its value in the last 24 hours, seeing a drop to $ 26,653, far below the $ 30,000 benchmark often used to reassure investors.
Meanwhile the world’s second-largest cryptocurrency, Ethereum, dropped twenty percent of its value in just 24 hours.
The Terra, or Luna, cryptocurrency has fallen by more than a staggering 99 percent.
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Paul Dales, chief UK economist at Capital Economics, explained the role of the UK’s GDP in the growing crisis.
He said: “The risk of recession has just risen, although strong price pressures will probably mean the BoE will raise interest rates further.
“The key point is that all of the growth in the first quarter came when GDP rose by 0.7pc in January.
“GDP was flat in February and fell by 0.1pc in March, which leaves the economy with no momentum just when the surge in inflation is starting to become a big drag on households’ real incomes.
“Suddenly, our forecasts that GDP will be flat in both the second quarter and third quarter seem pretty optimistic. A contraction in GDP or a recession now feels a bit more likely. “
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Soaring inflation is decimating household budgets in the UK, and John Lewis boss Sharon White is the latest to demand the UK government does more to tackle the cost of living crisis.
Speaking on ITV’s Peston last night, Ms White said: “I think the time absolutely has come for action, whether it’s an emergency budget or whether it’s another vehicle.
“As I say, I think we’re all really nervous about what’s going to happen in October, so when energy bills potentially go up again by up to £ 1,000, it’s winter.”
One suggested strategy is a windfall tax on energy giants who are raking in major profits as the rest of the economy struggles – but the idea appears to have divided Boris Johnson and his Chancellor.
Rishi Sunak has said he’s “not naturally attracted to the idea of them but what I do know is that these companies are making a significant amount of profit at the moment because of these very elevated prices.”
However, Boris Johnson ruled out such a tax this morning, warning it would deter investment.