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Almost £175 billion has been erased from the value of UK stocks. stock market In merely seven days – striking at the pensions and savings of millions.
As the market downturn caused by Donald Trump ’s trade war accelerated, the FTSE 100 experienced its most significant decline since the start of the pandemic.
The severe downturn, which reverberated from Wall Street onwards, Asia , followed President Trump imposing severe tariffs on trade partners, which sparked concerns about a potential global economic downturn. Experts cautioned that this could jeopardize the retirement aspirations of individuals planning to collect their pensions in the coming years.
As global markets suffered a $5.6 trillion loss this week, the colossal firmJP Morgan cautioned: 'There will be blood.'
The investment firm stated that the likelihood of a worldwide economic downturn has surged from 40 percent to 60 percent following Mr. Trump’s imposition of a base tariff of 10 percent on all imported goods into the U.S. Certain nations faced even steeper rates, reaching as high as 50 percent, which sent tremors throughout international financial markets.
The route intensified yesterday afterwards. Beijing responded with a 34 percent tariff on U.S. imports, as the deadlock between the two biggest economic powers pushed the globe nearer to an all-out trade conflict.
Concerns that other countries might implement reciprocal tariffs in the upcoming days fueled the growing anxiety permeating through financial markets.
Posting on his Truth Social platform, Mr Trump asserted: " China got it wrong, they panicked – the one thing they can’t allow themselves to do.'
He stated that the significant decline in stock values presented a purchasing chance for investors. "It's an incredible period to amass great wealth, even greater than what has been seen before," the President remarked, asserting that his policies would remain unchanged.
Yesterday, Mr. Trump introduced a new 'Gold Card,' which is a U.S. residency permit for non-citizens priced at $5 million (£3.9 million). During an event on his official aircraft, Air Force One, he presented a sample of this 'Trump Card' to journalists.
Following a dip of 1.5% on Thursday, the FTSE 100 index for leading stocks plummeted an additional 4.9%, marking its most significant decline in half a decade. Meanwhile, the more domestically oriented FTSE 250 dropped by 4.4%. Additionally, the broader-based FTSE All-Share Index, covering approximately 600 firms listed in London, declined sharply by 4.87%. Over the course of this week, these indices collectively lost about £173.5 billion from their overall worth.
Experts cautioned that this massive selling spree could significantly impact pensions and savings. "Individuals who aren't too far from retiring may have genuine cause for worry due to the fluctuating markets," stated Myron Jobson, a senior personal finance analyst at UK stockbroker Interactive Investor.
'A prolonged decline in stock markets might considerably reduce the worth of their pension savings precisely when they're about to start using them. Consequently, this risk has the potential to derail their retirement plans.'
'For pensioners counting on investment gains, a declining stock market might imply that their savings may not cover as much as they anticipated.'
Dan Coatsworth, an investment analyst at AJ Bell, advised British savers to 'keep their focus on the long-term horizon and maintain their confidence' and stated that 'the market disruptions triggered by tariffs and concerns over a potential global trade war do not justify halting investments'.
Shocks rippled through worldwide financial markets, as European equities faced additional pressure while still recovering from previous declines earlier in the week. Following a 2.6 percent dip on Thursday, the pan-European Stoxx 600 index dropped an extra 5.2 percent.
In Frankfurt, the DAX declined by 4.66 percent, and the CAC 40 in Paris decreased by 4.26 percent. The FTSE MIB in Milan plummeted 6.53 percent, whereas the Ibex 35 in Madrid sank by 5.8 percent.
On Friday, Wall Street took a hit as well, with the key S&P 500 index plummeting up to 3.8 percent and the Dow Jones Industrial Average declining by 3.4 percent. Following the nearly five percent drop seen on Thursday, the technology-driven Nasdaq Composite fell sharply by 3.98 percent. This brought the index’s decline since reaching its peak recently over the twenty-percent mark, pushing it into what traders refer to as a 'bear market'.
The bloodshed in American markets also impacted British savers, since numerous individuals have part of their pension and other investments locked into U.S. stocks.
Mr. Coatsworth from AJ Bell stated that the significant decline in U.S. prices served as a 'healthy reminder to maintain a well-diversified investment portfolio.'
The CBOE Volatility Index, often referred to as Wall Street’s fear meter, reached its peak since August 2024, standing at 37.66 points.
'A number of investors I've spoken with have simply stated that in this type of climate, we should move to cash and bide our time,' remarked Rick Meckler, a partner at the family investment firm Cherry Lane Investments.
'The market is anticipating a worldwide economic downturn,' said George Saravelos, who leads foreign exchange research globally at Deutsche Bank.
Asian shares tumbled overnight on Thursday following the imposition of some of Trump's harshest tariffs on the region.
Tokyo’s Nikkei plummeted by 2.75 percent, Hong Kong’s Hang Seng decreased by 1.52 percent, and China’s Shanghai Composite declined by 0.24 percent.
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