Friday, September 16, 2011

UK is 'not immune' to global crisis: Osborne's warning as markets see early surge after banks band together to shore up faltering Eurozone

The UK is 'not immune' to the global economic crisis, chancellor George Osborne warned this morning.

But, speaking in Manchester before heading out to a financial summit in Poland, he insisted the coalition's austerity measures had put the country 'ahead of the curve' and ensured interest rates can stay low.

His comments come the day after a major global bailout fund, backed by British taxpayers, was launched to stop Europe’s creaking banks running out of money.

And they follow an early rally this morning in the European markets, which has been seen as a direct response to the plans, backed by the Bank of England, to flood central banks around the world with unlimited amounts of cash.

The dramatic intervention, on the third anniversary of the collapse of investment bank Lehman Brothers, underlined how worried finance chiefs are from America to Japan about the global economy.

It echoed the coordinated action taken by central banks in autumn 2008 during the worst days of the financial crisis. And it led to a surge on the markets early this morning.At 7.06am, the FTSEurofirst 300 index of top European shares was up 0.9 per cent at 941.38 points.

The benchmark index has risen 7.3 per cent since hitting a 2-year low on Tuesday. Banks featured among the top gainers, with Societe Generale up 4.2 per cent and Deutsche Bank up 4.5 per cent.

The FTSE-100 index also saw an immediate rise, and at 8.15am was up 40.91 to 5378.45. Read More