Britain’s stalled housing market and investor jitters over Donald Trump threatening fresh tariffs against China has hit leading UK-listed stocks.
The top-flight FTSE 100 index was dragged down a further 2.3% after suffering its worst one-day loss for a month on Thursday as the effects of COVID-19lockdowns on the global economy became clearer.
It wiped out gains seen earlier in the week after signs of several countries easing coronavirus restrictions.
The slide continued after the US president ramped up the anti-China rhetoric again as he warned of retaliatory tariffs against Beijing as punishment for failing to contain the outbreak.
Mr Trump claimed to have seen evidence that coronavirus originated in a Wuhan laboratory, but declined to give details.
Meanwhile back home, fresh data showed the number of mortgages being approved to home buyers plunged to a seven-year low in March.
The sharp fall came amid signs that households were belt-tightening and getting their finances in order by making large repayments on other types of borrowing such as credit cards.
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Figures from the Bank of England show that 56,161 mortgages were approved for house purchase in March.
This was a drop-off of nearly a quarter (24%) compared with the previous month, and the lowest monthly total since 54,341 approvals were recorded in March 2013.
Households also paid back a total £3.8bn of consumer credit in March, including personal loans, overdrafts and credit cards, which represented the largest net repayment the Bank’s money and credit report has recorded.
Separate data indicated manufacturers suffered the biggest fall in output and orders for at least three decades in April.
The closely watched Purchasing Managers’ Index (PMI) for the sector fell to 32.6 last month, with anything below 50 viewed as a sign of a contracting industry.
The drop, from 47.8 in March, is one of the steepest since the IHS Markit/CIPS surveys were first carried out 28 years ago, according to those who compile it.
It also beats the previous lowest score of 34.5, which was recorded in February 2009 during the financial crisis, and means UK manufacturing has been in decline for 10 of the past 12 months.
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Rob Dobson, director at IHS Markit, which compiles the survey, said: “UK manufacturing suffered its worst month in recent history in April, as output, order books and employment all fell at rates far surpassing anything seen in the PMI survey’s 28-year history.”
He added: “The outstanding question remains how long the current restrictions will need to remain in place, and which sectors can start to safely reopen.
“The pressure is mounting as the longer the global economy remains in lockdown, the greater the cost to industry will grow, and the greater the likelihood that more jobs will be cut.”