The FTSE 100 index has plummeted to its lowest level in two months after Donald Trump announced a wave of tariffs on Tuesday.
When the index closed yesterday, the London stock market was down by more than 100 points, 1.2% to 8496. It was the sixth session in a row to fall.
British Airways owner IAG fell by the largest figure, down 6.4%, while Holiday Inn owner IHG was also down by 3.6%. Pest controller Rentokil fell by 4.5%, and industrial components groups Diploma and Spirax were down 4.4% and 3.8%, respectively.
It comes as US stocks dropped again after huge uncertainty caused by the President’s tariffs plan.
Donald Trump‘s global trade war has escalated, with a 25% levy on steel and aluminium coming into force overnight in the UK and EU.
The European Commission has vowed to impose “countermeasures”, with European Commission Ursula von der Leyen saying: “We deeply regret this measure. We are ready to engage in meaningful dialogue.”
However, Britain is keeping a “cool-head” as Exchequer Secretary to the Treasury James Murray says “the UK is in a “very different position than the EU”.
“The UK and the US have been negotiating rapidly for an economic agreement, and so we’re in a position where that negotiation is ongoing and these global tariffs, if you like, have landed in the middle of that work,” he told Sky News.
“So we don’t want to be pushed off course by this.
“We want to carry on with our rapid negotiation toward an economic agreement, because we think that’s in the best interest of British businesses and the British public.”
The FTSE 100 has, however, opened higher this morning after Donald Trump reversed his plans to double tariffs on Canada’s steel and aluminium sector.
Tuesday saw the UK’s blue-chip index drop 1.2% following the announcement to raise metal tariffs to 50% levy on his closest ally.
After Canada hit back with a retaliatory 25% electricity export tariff, the President backtracked down to his original plan of 25%. This saw the the FTSE 100 bounce back by 0.2% to 8,512.37.
