The UK economy is currently in the middle of the longest unbroken period of economic growth on record, analysts claim.
Research from Halifax Financial Services suggests since the day almost 20 years when world stock markets plummeted – known as Black Monday – UK stocks have climbed by 223%.
Black Monday, 20 years ago this Friday, saw the FTSE 100 fall by 11% - wiping billions of pounds from the London stock market – in a single day.
But Martin Ellis, chief economist at Halifax Financial Services, says the UK economy has proven its strength and resolve ever since.
“While the 1987 stock market crash was clearly one of the major events for financial markets and economies during the 20th century, the strong long-term performance of the UK stock market since then should not be surprising,” he says.
“The UK economy is in the midst of the longest unbroken period of economic growth on record and London's position as one of the world's major financial centres also makes it an important destination for global capital flows.”
On Black Monday the FTSE Index fell from 2302 to 2052 – a fall of 11%.
Halifax analysts point out the UK stock market took two years to recover from the 1987 crash.
It says the FTSE 100 Share Index took just under two years to recover their pre-Black Monday levels whilst the Dow Jones Industrial Average took just over one year.
The Hong Kong market took three-and-a-half years to recover, it adds, while the Australian stock market took just over six years.
Analysts also point out global stock markets had been performing very well in the run-up to Black Monday.
According to research, the FTSE 100 rose by 37% in 1987 following a 19% UK stock price increase in 1986.
The Dow Jones Industrial Average rose by 19% in 1987 up to Black Monday, preceded by a 23% increase in 1986.
The Hang Seng share index in Hong Kong experienced the strongest gains pre-Black Monday, rising by 47% in 1987 up until October 19th, following a similar rate of growth in 1986.
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