Economics / Markets

The FTSE100 is on the edge of entering its own ‘bear market' this morning, less than two days after the Dow Jones IA retreated under bear territory.

The European Central Bank (ECB) has hiked interest rates by 25 basis points to 4.25pc.

The Dow Jones Industrial Average officially entered a ‘bear market' on Wednesday after a fresh oil record led to a further fall for US blue-chips stocks.

In London, stocks suffered as house builder shares plummeted and major retailers made gloomy sales predictions, with the FTSE 100 losing 53.6 points (0.98%) to 5,426.3.

The UK economy is set for two years of sluggish growth, with expansion of 1.7pc expected this year and just 1.3pc in 2009, according to the centre for economics and business research (cebr).

London markets have opened well this morning with strong pharma and resource stocks fighting off stunning losses to M&S and the retail sector. The FTSE100 is currently 22.90 points higher (0.42%) to 5502.80.

US stock prices should "grind higher" in the second half of 2008, according to Bob Doll, global CIO of equities at BlackRock.

A rapid decline on the FTSE has seen the index ship more than 124 points, or 2.2%, to slump to 5,501.7.

Net retail sales of funds grew for the fourth month running, with inflows of £653.3m according to the latest IMA statistics.

The credit crunch will continue to create difficult investment conditions for the next two to three years, according to Nicola Horlick, chief executive of Bramdean Asset Management.