Global share prices tumble as eurozone panic spreads
Bad news from US and China suggests Europe’s crisis is hitting economies worldwide
Friday 1 June 2012
Billions of pounds were wiped off share prices across the world as investors took fright at mounting evidence that political paralysis in the eurozone has sparked a global economic downturn.
News that just 69,000 jobs were created in the US last month, the lowest figure for a year, underlined growing fears that weak demand from crisis-hit Europe is hitting businesses thousands of miles away.
In the UK, evidence of a sharp drop in manufacturing output in May increased the chances that the Bank of England will unleash a fresh round of recession-busting quantitative easing when it meets next week to cushion the economy against the turmoil across the Channel. With Spain at risk of being driven to accept an emergency bailout as it struggles to shore up its banking sector, the collapse of confidence in the eurozone appears to be rippling across the globe.
Firms in the US have dramatically slowed the pace of hiring, and the official unemployment rate rose in May, for the first time in nine months, up one percentage point from 8.1% in April.
The jobs report is bad news for Barack Obama, with the economy expected to be a major election battleground. The US president said: “We’ve got responsibilities that are bigger than an election; the economy is still not where it needs to be.”