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Britain bounces back as shares, sterling and bonuses soar
Jonathan Prynn, Consumer Business Editor14.10.09
Hopes of a rapid economic recovery were dramatically lifted today as the stock market soared to a new yearly high and the rise in unemployment appeared to stall.
On one of the most upbeat days in the City since the credit crunch first took hold more than two years ago:
* The FTSE 100 Share Index surged two per cent to a new 2009 high of 5256.21, up 102.06 points.
* The pound recovered lost ground against the dollar, rising 0.55 cents to $1.5979 by early afternoon.
* The unemployment total rose far less than forecast and actually fell slightly in August, the first monthly drop since spring last year.
* US investment bank JP Morgan unveiled “stellar” profits of £2.25 billion, pointing towards a strong bonus season in the City. Its 4,000 staff in London are expected to collect average pay and bonuses of around £300,000 this year.
Ministers were anxious not to stoke expectations but Gordon Brown's spokesman said: “The fact that these figures show a significant slowing must be seen as a promising sign.”
Veteran City commentator David Buik, of brokers BGC Partners, said that while it was too early to call an end to the economic downturn, “let's face it, things are a hell of a lot better than a year ago”. There were increasing signs of the autumnal equivalent of “green shoots,” he added. “It's nice to see the copper beech in full bloom.”
Hopes for economy after surprise fall in unemployment
Anger over City bankers' £5bn bonus bonanza
Reader views (9)
I'm still perplexed that so many people are buying into a recovery.
The fundamentals are totally disintegrating both for the UK and the US at least. You might be able to restart an old engine but it's still an old engine and at some point very soon it's going to be beyond repair (cover-up).
- Anthonyc, New York, NY
Graham Rodhouse Holland
"but it is not exactly bad news is it"
It is NO NEWS. If you believe anything the government tells you as regards to figures you must be deluded, the government has more experience of massaging figures than a thai prostitute, and yippee 4,000 bankers and their bonuses are going to lift us out of this mire, as for the 'veteran' banker seeing Copper beech in full bloom, may i humbly suggest he looks at his trees a bit more carefully because he is actual looking at the horse chestnut tree.
- David, London
Praise where praise is due, Brown & Darling have been forecasting for some time a slow but steady improvement in the economy with more to come in the New Year. They appear to be getting it right. Whether these two shrewd Scotsmen can convince the electorate of there worth is another matter, but don't write the sweaties off.
- Ventnorfan, Isleworth, Middx
Great, all we need now is the government to keep giving 20% of the UK's GDP to the banks every year to keep up the boom. Maybe a gift of £2000 to everyone will get us spending again, make that £20,000, after all its only paper.
- Peter, Battersea
Public sector to have pay freeze while the city start the bonus craze al over again. Dave Cameron sit up and pay attention.
The Jogger
- The Jogger, Chichester UK
I'm not surprised there is a crisis in confidence with George and Dave, the Two Horsemen of the Apocalypse getting such fawning coverage for their Broken Britain Dirge.
- S B Gartram, Sutton England
Maybe we´ve turned the corner already. Let´s not count our chickens too soon, but it´s not exactly bad news, is it?
- Graham Rodhouse, Helmond, Netherlands
Sterling soars?? Steady on old chap! It may have had a modest bounce on the data but it's softer again now - don't get sucked in to only watching it against the dollar. EUR/GBP at current levels is equivalent to less than 7.00 for the French Franc and if it regains .9790 that's less than 2.00 against the Deutschmark!
- Paul, London
A lot of the problems were caused by a lack of confidence.
With the injection of confidence hopefully other sectors will start to resurface.
This can only be good news.
- Greg, London
